What to do with these lost neighborhoods?  It is the late dawn of the twenty-first century, when integration is stronger and civil rights laws are weaker, when local government budgets are dwarfed by demands.  Suing local governments or lobbying them, two of the most important strategies of twentieth-century advocacy for social justice, have been undermined by legal developments that drained city revenues and withdrew federal remedial power to address racial segregation. 

Yet state and local government laws retain malleability.  Laws governing the allocation of power among local agencies exert significant influence over unincorporated urban areas specifically and spatial polarization by race and class more generally.  This Editorial argues for a new priority in metropolitan law and policy: state legislative reforms to empower and reshape county governments to represent regional interests and regional logic in intergovernmental negotiations, including negotiations over annexation.  Strengthening counties to bargain with other local agencies over matters with redistributive consequences, like annexation, can bring a metropolitan perspective to critical local decisionmaking and create a promising corridor for addressing contemporary issues of urban inequality. 

Part I introduces the unincorporated urban areas problem, describing these neighborhoods and the pattern of selective annexation (known as municipal underbounding) that underlies their formation.  Part II explores the two traditional tools of change and their current constraints: first, organizing efforts to lobby for inclusion and redistribution within existing local politics, which are hampered by cities’ finance-driven rules for growth management and annexation; and second, antidiscrimination litigation to remedy a pattern of discriminatory annexation, which has been confined by courts’ reluctance to mandate the movement of a local border.  Part III harnesses the flexibility created by a strong political and judicial doctrine of local autonomy by proposing reforms that empower county governments to exert greater influence over (without dictating) annexations. 

Part problem-solving for the unincorporated urban areas problem in particular, and part exploration of solutions to metropolitan inequality in general, this Editorial offers a new direction for state and local government law to seek progress on economic and racial polarization in America’s cities.  It brings counties—our most neglected, undertheorized layer of state government—into sharper relief and conceives for them a regional, redistributive purpose. 

 I. Unincorporated Urban Areas, Municipal Underbounding, and the Annexation Solution

Discriminatory annexation is known to urban geographers as municipal underbounding: annexation policies and practices in which municipalities grow around or away from low-income minority communities, thus excluding them from voting rights in city elections and municipal services.   Excluded from city boundaries (and too poor, if not too small, to form their own city), underbounded neighborhoods remain unincorporated and dependent on counties as their most proximate layer of general-purpose local government.  In past work, I have called these neighborhoods unincorporated urban areas, and I’ve found that they are characterized by one or both of two main challenges: a lack of basic infrastructure and services like wastewater treatment and street lights and/or an overconcentration of undesirable land uses like freeways and municipal utility plants.  Each such neighborhood identified to date is predominantly Latino and African-American, often with a history of settlement under de jure and de facto segregation.  

Where are these areas, and how many towns and cities exhibit this problem?  We have no consolidated national research on these questions, but we can triangulate a general picture of the problem as prevalent in the South and the Southwest.  Qualitative research has investigated dozens of high-poverty unincorporated urban areas in Texas, California, North Carolina, Florida, and Mississippi.  A study of census data from 1990 and 2000 found that African-American communities adjacent to non-metropolitan towns in the South are more likely to be bypassed for annexation than similar white communities.  Studies of poverty in unincorporated areas more generally (not necessarily unincorporated urban areas near a city border), have identified thousands of low-income unincorporated subdivisions in the Southwest—including at least 1,800 in Texas alone.   

Heretofore, municipal underbounding and the unincorporated urban areas it creates have been understudied, if not invisible.  In the annexation context, municipal underbounding has been hidden in the shadows of academic and policy assumptions that increasing city power and autonomy over annexations will increase the number and extent of annexations, and that such change will be against the interests of unincorporated areas.  In the spatial inequality context, the problem of unincorporated poverty has been overshadowed by other forms of interjurisdictional segregation and fragmentation, particularly the economic and racial polarization of core cities and their independently incorporated suburbs.  A wave of awareness and advocacy on unincorporated urban areas, however, is beginning to crest. 

Meeting the needs of unincorporated urban areas can take at least four directions: relocate households individually, improve county government, form an independent city, and seek annexation to an existing city.  This Editorial focuses on annexation.  This avenue is not offered as a one-size-fits-all solution—it has risks and downsides for some communities.  Yet it is a realistic and desirable prescription in many cases for three reasons.  First, annexation leads to service improvements and extensions by bringing unincorporated urban areas into a city that already provides such urban services and triggering existing legal requirements that cities bring underserved areas up to municipal health and safety standards.  Second, by providing city voting rights (giving residents of unincorporated urban areas the same two levels of local government that city dwellers usually enjoy), annexation also increases the proximity and, potentially, the responsiveness of political representation.  Finally, annexation leaves historically rooted communities intact. It moves borders—not homes or people—in order to “relocate” a neighborhood from one jurisdiction to another.   

II. Traditional Tools: Community Organizing and Civil Rights Litigation

In the tradition of their times, residents of unincorporated urban areas and their advocates have deployed conventional tools of change: they have organized locally and they have sued.  Activism in (and patience with) the local political and market economy is a commonly recommended antidote to problems of spatial inequality in a post-civil rights era.  Where local politics are contaminated by racial discrimination, constitutional equal protection and statutory voting rights protections are assumed to reach the problem.  Yet changes in state and federal law have enfeebled both tactics. 

Applied to the problem of unincorporated urban areas, a community organizing strategy predicts that lobbying city and county governments can lead to service improvements and annexations.  Yet the problems of unincorporated urban areas, including municipal underbounding, are ill-suited to this approach, if one adheres to the premise, as the Article does, that avoiding the involuntary displacement of existing residents is a central priority.  Under the current system of local finance, cities enjoy the legal right, if not the fiduciary duty, to engage in class discrimination when making annexation choices.  Borders are, in essence, saleable goods in the contemporary political economy.  Local governments now effectively set a price for (1) entry (a landowner or group of landowners seeking to relocate a local border to encompass their parcels through annexation), and (2) residence (services provided within a jurisdiction).  State laws widely mandate fiscal impact assessments of boundary changes, and they currently provide few incentives or benefits to offset fiscal losses from the annexation of a poor neighborhood.  As a practical matter, capital investment and increased tax revenue in unincorporated urban areas are currently prerequisites to annexation within local political economies. 

When politics fails, municipal underbounding seems ripe for a litigation solution reflective of the problem’s history of racial segregation and racially ordered provision of municipal services and voting rights.  Yet addressing any problem of spatial inequality—be it racial segregation, disparities in neighborhood services, or discriminatory annexation, to name a few—through a civil rights lawsuit faces formidable, well-known doctrinal barriers.  And in the context of municipal underbounding, an unincorporated urban area also faces an additional barrier: Federal courts are reluctant, or perhaps even unwilling, to move a local border. Only a narrow band of factual scenarios can be redressed with existing antidiscrimination protections, and even in those cases, local autonomy to establish and move local borders has come to serve not only as a license to behave in any way consistent with state law, but also as a quasi-affirmative defense to claims that racial discrimination was a motivating force behind service or annexation decisions.  My full Article discusses this particular barrier to using civil rights laws as a mode of redress for municipal underbounding, re-reading voting rights and school desegregation cases to investigate federal authority to mandate a shift in local borders. 

III. Overcoming County Powerlessness in Annexation Law

This new landscape of hardened American municipal borders—subject to a marketplace for entry and residence and insulated from federal antidiscrimination law—impedes solutions to the unincorporated urban areas issue that rely on the tools of local activism or civil rights litigation.  Yet the local autonomy fostered over the twentieth century suggests an alternative strategy: to preserve local control as against state or federal power, but to reshuffle the metropolitan agenda by giving county governments a stronger and more regional role to play. 

Academic and public debates about American annexation law have pivoted around a single story with two actors (the revenue-hungry city and the property-rich suburb, whether existing or planned) and one scenario (an aggressor city seeks to annex the suburb against its landowners’ wishes).  Municipal underbounding requires a place for two new actors (the service-poor county and the low-income suburb) and one additional scenario (a city refuses to annex a supplicant suburb).  Accommodating this more complex picture of annexations requires that we give county governments some influence over annexation decisions and ease the procedures by which outsiders to a city can seek annexation. 

Changes in pursuit of these objectives are important, but they must be subject to a key counterbalance: the positive attributes of city control and veto power over some annexations.  City power and discretion over matters of annexation enables cities to capture population growth and new revenues at their fringes, which is a critical element of the elasticity widely believed essential for urban fiscal health.   Sound urban growth management requires that cities can check counties’ incentive to permit (or simply fail to control) new land uses outside of city lines that facilitate uncoordinated and inadequately served urban sprawl that can later be handed over to a city’s balance sheet.  For these reasons, advocates for giving cities stronger annexation powers—including the “involuntary annexation” power to annex areas against residents’ will—ground their views in the sensible and worthwhile goal that city boundaries encompass city growth.   They argue that annexation law should prevent wealthy unincorporated suburbs from freeriding on city taxpayers by enjoying the advantages of adjacency to city life without paying city taxes for city services. 

City boundaries should indeed encompass urban land, but that principle should apply across the board—whether the urban land at issue is rich or poor.  To find that consistency, balancing freerider effects against inclusionary goals, cities cannot be the sole governmental negotiating interest in annexations.  Thus, rather than substituting strong counties for strong cities (simply empowering a new self-interested local government in place of an old one) the proposals advanced in my Article do not advocate replacing city power over annexations, but rather to introduce counties as a stronger negotiating partner to guide annexation outcomes.  Interlocal negotiations can balance cities’ legitimate need for urban growth control (and anti-sprawl objectives in general) against state and regional needs for adequate and efficient urban services in all urbanized areas. 

Indeed, certain existing features of county government make it an attractive negotiating partner over annexation, even from the perspective of city interests.  The same rule of county government that makes it a diffuse and distant local government (thus increasing the attraction of annexation or incorporation solutions for urban areas) makes it a ready-made regional government tied to city interests: Residents of incorporated areas enjoy the same voting rights in county government as are held by unincorporated area residents.  Political accountability to city interests is thus built in to county governance.  When it comes to interlocal negotiations of the kind described here, stronger counties do not necessarily mean weaker cities. 

Readers interested in the specific portfolio of reforms proposed are referred to my Article, but suffice it to summarize here that I propose two categories of state legal reforms to bring counties into annexation decisions: empowering counties and their residents to initiate, facilitate, and consent to annexations; and protecting counties, where appropriate, from annexations that will cherrypick unincorporated land to leave behind residual territory that is underserved, inefficient to govern, or too costly to serve at habitable standards. 

If state law facilitates annexations, the question remains: who will pay for the necessary infrastructure upgrades to bring unincorporated urban areas within city service networks and up to city standards?   Infrastructure financing is messy and scarce.  My Article looks to historical models of infrastructure funding to argue for a modernized version of nineteenth-century extraterritorial service provision (an adaptation that is peculiarly well suited to recessions with thin local budgets): conscript cities to compete for federal capital funds (including economic stimulus dollars in our current economy), that can retrofit affordable housing at the urban fringe with urban services and infrastructure.  Just as turn-of-the-twentieth-century cities in the United States served as brokers and leaders of fringe infrastructure, contemporary cities in many states are in the best position to plan and compete for, not to mention spend, federal dollars on urban infrastructure.  Cities’ higher levels of professional staffing, greater experience with competitive intergovernmental grant programs, smaller constituencies, and control over urban service providers make them better equipped to compete in a world of costly, highly engineered proposals.  The duty to fight for funds on behalf of unincorporated urban areas is particularly justified in states that give cities extraterritorial land use authority, because such power should come with corresponding obligations to pursue habitability improvements aggressively in urban fringe areas. 

IV. Conclusion

The problem of high-poverty, urbanized areas mapped out of city borders by annexation decisions is among America’s most severe problems of spatial inequality.  The lobby and the lawsuit, two dominant strategies for achieving social justice in the twentieth century, have proven to be blunt instruments in the fight to improve services and political rights in these areas.  Yet the very local autonomy fostered by state legislatures and federal courts suggests an alternative strategy: to preserve local control as against state or federal power, but to reshuffle the metropolitan agenda by giving county governments a stronger and more regional role to play.  Applied to the problem of municipal underbounding, county governments need a stronger influence over in annexation decisions.

In this reconception of county power over annexations lies the seed of future potential, and indeed this author’s own future research: Might counties offer untapped potential over other matters of interjurisdictional segregation and spatial inequality?  In particular, can we adjust county power (through a process of both adding and subtracting measures of their authority) to alleviate economic and racial polarization among their constituent cities?  The characteristic that makes counties poor substitutes for a first-tier city government—their equal obligations to the residents of all cities and unincorporated places in their territory—suggests an untapped potential to coordinate and rationalize metropolitan regions.  Many issues remain for future inquiry, not the least of which will be counties’ potential for political capture by their largest cities, their thin record on the pursuit of redistributive justice, and their poor land use planning.  For now, suffice it to observe that over matters of annexation, counties’ weak hand has enabled the unchecked practice of municipal underbounding and stranded unincorporated islands and fringes in material stasis and decay.  Counties have no vested interest in the status quo (quite the opposite is true), and there is every reason to expect them to seek annexations for their high poverty pockets.  On this issue at least, reform of county power provides a footpath forward.       

Like fossils, unincorporated urban areas reveal a history of twentieth-century urban change in the control of local boundaries.  Like laboratories, they offer a setting in which to test twenty-first-century strategies for resolving questions of social injustice.  By investigating a contemporary problem of pre-civil rights vintage, we find old wounds and new possibilities, both hidden under history’s crust.

Acknowledgments:

Copyright © 2010 Stanford Law Review.

Michelle Wilde Anderson is an Assistant Professor of Law at the University of California, Berkeley School of Law. 

This Legal Workshop Editorial is based on the following Law Review Article: Michelle Wilde Anderson, Mapped Out of Local Democracy, 62 STAN. L. REV. 931 (2010).

Much of the literature related to large settlements seeks to improve how judges and private actors serve the large groups of people impacted by a massive settlement.¹  Settlement funds have reformed, in turn, by giving people more choices, such as more filing opportunities, different settlement outcomes, and extended deadlines. More opportunities to opt out of a large settlement theoretically assure that the fund’s administrators represent the interests of those who do not opt out. More choices of settlement awards means that more claimants can elect awards that fit their individual needs and circumstances. And more time to decide helps claimants to arrive at decisions that reflect their divergent interests. Few commentators have considered, however, how claimants to a large settlement fund make those choices.² Modern reform efforts, rather, assume that claimants make rational decisions about their options based on their own stable values and preferences.³

But is that correct? Studies have long shown that because of cognitive bias, people may buy things they do not want, save too little for retirement, or make risky choices about their health—based on their point of reference, the timing of the decision, and the presence of seemingly irrelevant choices.⁴ Behavioral economists have examined these ostensibly irrational decisions in many other legal contexts, but few commentators have explored these effects in the context of a large group settlement. Because claimants to large settlements are generally unassisted laypersons, large settlement funds may be particularly compelling settings to examine the adverse impact of cognitive bias.

To that end, I make three claims in this Essay. First, people may make irrational decisions about their settlement options in a large settlement fund because of cognitive bias. Second, cognitive bias may undermine some of the stated purposes of public and private settlement funds—to provide claimants with more access, efficiency, and fairness than in traditional litigation. Third, “fund designers”—judges, lawmakers, and agencies—should identify and, in some cases, capitalize on claimants’ cognitive bias by altering the context, timing, and sequence of settlement options. Fund designers, however, should avoid reforms that unduly eliminate settlement options or impose excessive administrative costs. Rather, the benefits of any reform—preventing avoidable harm to irrational claimants—must outweigh the potential costs, including the value of client autonomy, the chance of error, and the burden on the courts and public administrators.

I examine these three claims by describing how three cognitive biases are likely to affect claimants in large settlement funds. These biases are: (1) status quo bias, (2) contrast bias, and (3) time-inconsistency bias.

I.

Status Quo Bias

Status quo bias refers to a person’s tendency to stick to the status quo even when other options would increase well-being. In principle, a completely rational person will choose between alternatives based on his or her preferences and the potential costs of making an informed decision. In practice, however, simply characterizing an option as the status quo significantly increases the chances that a person will choose that option. Some speculate that this preference for the status quo derives from a general aversion to risks caused by one’s own actions, even when there are greater risks associated with inaction.⁵

For example, alternative investment and saving options are significantly more popular among college professors when designated as the status quo or the default choice.⁶ Because of the status quo effect, some commentators like Cass Sunstein and Richard Thaler have advocated “libertarian paternalistic” ways to encourage saving.⁷ They advocate changing the default rules to promote particular outcomes—like an employee’s decision to enroll in a 401(k) retirement plan—without limiting the employee’s opportunity to opt out of the plan at a later time.

Of course, switching costs also might explain adherence to default rules. A decisionmaker may rationally determine that it is not worth the time, money, or potential opportunity cost to deviate from the status quo. Moreover, people may be rationally indifferent to certain choices. Such explanations, however, do not fully account for how people make decisions. Although the subject of some criticism, many studies show that people irrationally overvalue either the default option or the costs associated with departing from the default option.⁸

In class action settlements and public settlement funds, status quo bias may be unavoidable. After all, there must be a default rule that asks people either to affirmatively join or affirmatively withdraw from a large settlement fund. But status quo effects complicate the long-held belief that opt-out rights (1) ensure fairer settlements and (2) provide an adequate opportunity to claim or reject awards through the fund. When few people affirmatively opt out or object to a settlement, courts and administrators have assumed that the fund successfully represents what claimants rationally want and therefore ensures a “fair, reasonable, and adequate” settlement.⁹ Status quo bias, however, provides a reason to be skeptical of these assumptions and the policies based on them, even when very large payouts are involved. Many people will join a large fund not because the overall settlement reflects their values and interests but simply because the default rule requires parties to affirmatively opt out of the fund.

The status quo bias also contributes to the phenomenon of underclaiming, in which parties refuse to opt out of a settlement but never claim an award. Many public and private settlements require parties to complete a new form to claim an award, to choose among substantive settlement options, or to select a settlement process. Commentators studying claim rates in class action settlements have found that the fraction of funds actually disbursed was very modest in these so-called claims-made settlements.¹⁰ This includes cases in which claimants were otherwise entitled to substantial awards.

Accordingly, settlement funds could automatically process claims, not unlike automatic 401(k) plan enrollment. Under such a system, a settlement fund would automatically distribute presumed awards to claimants who join the fund. Such a policy, however, would come at a cost. Among other things, funds would bear the administrative cost of precisely identifying eligible claimants in advance of payment.

In light of potential costs, automatic processing would be more justified in certain funds. In large-value cases, for example, automatically processing claims would not be worth the administrative cost, the burden on the courts, and the potential for error or fraud. Thus, automatic processing may be warranted in welfare benefit settlements or shareholder class action funds, in which fund designers typically have a great deal of information about claimants, the awards are modest, and claimants generally do not choose among multiple settlement options.¹¹ Such policies would be more problematic in large mass tort settlements, in which settlement trusts or public settlement funds have less information about potential claimants, the awards are large, and claimants may be offered various procedural and substantive options in the settlement.

II.

Contrast Bias

Contrast bias is the irrational tendency to weigh an option more or less favorably depending on the presence of other options. Theoretically, a rational decisionmaker should not rank options differently simply because the options are described in a particular way. Moreover, the introduction of an additional choice should not alter a decisionmaker’s relative valuation of the original options. But this is not always the case.

Take, for example, the uncanny effects of decoy options—options that no one ever chooses but that make another alternative more appealing—on physical attraction. In a survey of six hundred students, a behavioral economist asked subjects to rate the looks of two men.¹² When asked to choose between the photographs of two equally attractive candidates—call one “George Clooney” and the other “Brad Pitt”—subjects were equally divided. When another group of subjects was asked to choose between the two initial candidates and a third candidate, a photoshopped and deformed version of George Clooney, however, 75 percent chose the unspoiled version of George Clooney and 25 percent chose Brad Pitt. Although no one selected the third option, the seemingly irrelevant introduction of an ugly version of George Clooney led 50 percent more students to believe that the original George Clooney was better looking than Brad Pitt.

Psychologists and behavioral economists have found that contrast effects directly impact a wide array of decisions, including consumer purchases, employment decisions, elective medical procedures, and even presidential elections.¹³ There are many explanations for contrast bias. Some suggest that it is simply easier to compare similar options among a set of choices than to give an absolute or innate value to any particular option. ¹⁴

The presence of contrast bias may be relevant to laws designed to improve the oversight of large settlements. Many settlement funds ask claimants to choose from an array of options after joining a settlement, in part to maximize the benefit to claimants with different interests in settlement. But the interrelationship of various settlement options may unwittingly impact a choice between cash and nonpecuniary awards, like coupons and warranties. In my own classes, I distribute an altered Apple iPod Settlement Notice as an illustration. After litigation over reported battery problems in old Apple iPods models, Apple settled and offered customers a choice of a $50 store credit or $25 in cash. Half of my students receive the original version of the iPod settlement notice. The other half receives a modified notice that contains the same two options—a $50 store credit and $25 in cash—and a decoy option, a $35 store credit. The results show the addition of a seemingly irrelevant coupon dramatically affects the students’ willingness to take the coupon settlement. The original group chooses cash more than 61 percent of the time; the decoy group chooses the cash only 40 percent of the time.

Contrast bias has implications for laws like the Class Action Fairness Act (“CAFA”), which expressly requires courts to conduct “fairness hearings” in coupon-only settlements and to postpone decisions about the amount of attorneys’ fees until after the coupons have been redeemed.¹⁵ CAFA’s purpose is to ensure that the attorneys’ fees are closely connected to the actual value of the settlement to the class. But CAFA does not impose a similar requirement for settlements involving both coupons and other options. Rather, courts may award attorneys’ fees upfront, based on an estimate of the cash value of the settlement apart from the portion of the settlement involving coupons. Due to contrast bias, courts may also have reason to wait for claimants to redeem these kinds of settlement awards: the coupon may encourage claimants to accept another settlement option that, by comparison, seems to offer a better value or greater liquidity. Such delay imposes costs. Class action litigation is risky business, and delaying even a portion of attorneys’ fees may dampen some attorneys’ willingness to file in the first place. But delay may be justified if it ensures that the attorneys’ fees better reflect the actual value that class members derive from the settlement.

III.

Time-Inconsistency Bias

Rational models of choice assume that people have time-consistent preferences. That is, a person’s relative preference for gratification will be the same no matter when he or she is asked. Substantial evidence, however, demonstrates that people have time-inconsistent or present-biased preferences. Ask whether a person prefers to rent Schindler’s List or So I Married an Axe Murderer, and the answer should not depend upon whether the decisionmaker plans to watch the movie today or later next week. But the proportion of people who elect to watch Schlindler’s List in the near future may be thirteen times higher than those willing to watch it on the same day they are asked.¹⁶ Present-biased preferences explain the systematic tendency to seek out more immediately gratifying benefits today than the long term benefits called for by earlier plans.¹⁷ More often than not, people choose a bird in the hand—be it dessert, a little extra cash, or a silly movie¹⁸—over three or four in the bush.

Time-inconsistency is compounded by nonintegrated decisionmaking. Nonintegrated decisions are rational decisions about costs and benefits in irrationally short periods of time. If a person had to choose whether to spend the next five minutes writing a paper or watching a YouTube video, she would rationally choose YouTube, the more pleasurable activity. After five minutes, she would rationally make the same decision again. But when the decision is viewed under a more integrated time horizon—four hours of paper writing versus four hours watching YouTube—she would rationally choose to write her paper. Because people are susceptible to nonintegrated decisionmaking, even small tastes for immediate gratification, or small costs associated with a task, may cause a naïve person to continuously postpone making decisions.

The converse of nonintegrated decisionmaking is that procrastinators will be highly sensitive to very small short-term incentives or penalties. Policies that make the cost of a short delay loom larger thus make procrastination less likely.¹⁹

Time-inconsistency bias may prove costly to claimants filing with a fund and to the administrative operation of the fund. Although some settlement funds fix relatively short deadlines, requiring filing within three to six months of settlement, other more complicated mass tort funds may allow one to two years to file. In many cases, there is no overt penalty for failing to file at an earlier time. There is a very powerful hidden penalty, however, to claimants—the time value of money and potential lost interest. For example, as illustrated in the graph below, more than half of the families affected by the September 11 attacks waited two years to file with the September 11 Victim Compensation Fund; as a result, each gave up, on average, over $100,000 in lost interest per year.

September 11 Victim Compensation Fund Claims Filed²⁰

Note the large spike in claims that appears just before the filing deadline on December 22, 2003. Rational considerations certainly explain some of the late filings. Claimants may choose to gather more information before filing with a large settlement fund. Or, particularly in large funds involving personal injuries, parties may need additional psychological distance from the event that gave rise to the claim. These explanations, however, are insufficient to account for the concentration of claims that appear just at the filing deadline of many large settlement funds. It is more likely that many claim filings represent present-biased preferences.

One solution is that large settlements could adopt rolling deadlines to encourage earlier filings. Parties could be required to file in the first week of each month until the final deadline. Human resource departments often use such rolling window systems to encourage employees to enroll in benefit programs, but these systems have never been applied in large public or private settlement funds. Cognitive science, however, suggests that such short-term incentives will encourage claimants to file more often over the duration of the fund, saving both opportunity costs to claimants and administrative costs to the fund.

Any such solution must take costs into account. Undoubtedly, rolling deadlines impose a cost on individual actors, who would suffer the inconvenience of filing at the beginning of the month, as well as on the fund, which would have to expend additional resources making such a filing system easy and transparent. But it would impose comparably small costs to claimants’ autonomy. A party unable to file at the beginning of the first month would always retain the ability to file the following month. A party that wants to wait for other strategic, information-driven, or psychological reasons would still retain that right.

Because of such costs, rolling deadlines may be more justified in funds that award high-value claims, like mass torts and some antitrust settlements, but not necessarily low-value claims, like consumer class actions. For high-value claims, the additional savings to the individual and the fund justify taking measures to encourage parties who might otherwise suboptimally delay filing.²¹

***

By “funding irrationality,” I do not challenge efforts to increase choices and opportunities for claimants to large funds. I only question whether such efforts, by themselves, are enough to accomplish their objectives of greater fairness, efficiency, and equity. Although such measures help rational participants to monitor, object, and exclude themselves from such funds, few measures exist to protect claimants who will make decisions based upon cognitive error. As this Essay demonstrates, there will be cases in which, on balance, many subjects will make poor decisions—both for themselves and for the fund as a whole—when available settlement options are not adjusted to account for cognitive biases. This is, in part, because in many large funds parties lack individual access to third-party expertise, like lawyers. Given the tremendous economic, social, and institutional resources devoted to operating large funds, it is worth asking: Are there better ways to design large funds? Can their design accommodate both rational and irrational decisionmaking?

I answer both questions with a qualified “yes” by recommending policies that benefit those prone to make cognitive errors but impose minimal costs on those who otherwise choose rationally. In so doing, I recommend accounting for and sometimes exploiting the timing, structure, and combination of options in large settlements to increase the welfare of all potential participants.

But such solutions raise fundamental questions of fairness and efficiency themselves: Will fund designers suffer from their own biases? Will procedures that fund irrationality unfairly limit claimants’ rights to control their own litigation? Will funding irrationality risk replacing one set of claimant biases with new biases that lead to even less desirable outcomes? These are all valid concerns. The compensatory goals of large funds require, however, that fund designers understand how claimants make choices and, when possible, adjust rules so that funds better serve them.

Acknowledgments:

Copyright © 2010 Duke Law Journal.

Adam S. Zimmerman is an Acting Assistant Professor at the New York University School of Law.

This Legal Workshop Editorial is based on the following article: Adam S. Zimmerman, Funding Irrationality, 59 DUKE L.J. 1105 (2010)

Unlike political scientists and law professors who link Supreme Court decision making to public opinion, we argue that Supreme Court Justices care more about the views of academics, journalists, and other elites than they do about public opinion.  This is true of nearly all Justices and is especially true of swing Justices, who often cast the critical votes in the Court’s most visible decisions.

Our argument is grounded in social psychology. In particular, we argue that Supreme Court Justices are not single-minded maximizers of legal or policy preferences. Instead, Justices seek both to advance favored policies and to win approval from audiences they care about. These audiences may include the public but are more likely to include elites—individuals and groups that have high socioeconomic status and political influence. The primary reason is that Supreme Court Justices themselves are social and economic elites. As such, they are likely to care a great deal about their reputations among other elites, including academics, journalists, other judges, fellow lawyers, members of other interest groups, and their friends and neighbors.

This view leads us to a different conception of the forces that shape the Court from the one expressed by most political scientists as well as legal scholars such as Barry Friedman and Jeff Rosen.¹ As those scholars see it, the Justices are devoted to achiev­ing what they see as the best legal policies, and they deviate from their most preferred policies only for strategic reasons—that is, when doing so advances those policies in the long run. Thus, to take one important example, the Justices accede to public opinion in order to maintain the Court’s legitimacy and its ability to make legal policy effectively.

In our view, in contrast, the Justices have concerns other than maximizing the achievement of their preferred legal policies, and prominent among those concerns is their interest in the regard of other people who are important to them. When the Justices deviate from their preferred legal policies, it may be because of strategic considerations, and some of these considerations relate to public opinion. However, it is more often the case that Justices are influenced by the views of other elites who are important to them for personal rather than strategic reasons. Thus, we agree with the scholars who emphasize that the Justices are primarily motivated by what they regard as good law or good policy; we disagree on the reasons that Justices sometimes deviate from the positions that they prefer.

Our argument proceeds in three parts. Part I calls attention to the various ways in which the Supreme Court is shaped by social and political forces, including changing social norms, appointments to the Court, and backlash from elected officials. Part II sets forth the social psychology model that we employ and, in so doing, criticizes the dominant political science models for failing to take account of the fact that Supreme Court Justices may care a great deal about what people in their social and professional networks think of them.  Part III backs up this claim, calling attention both to the limited influence of the mass public and to evidence suggesting that the Court is more attentive to the views of elites. Part III will also provide empirical support for the so-called “Greenhouse effect”—the pattern in which some Supreme Court Justices have drifted away from the conservatism of their early votes and opinions towards the stated preferences of cultural elites, including left-leaning journalists and the what some people think of as the liberal legal establishment that dominates at elite law schools.

 
I.
Social and Political Influences on Supreme Court Decision Making

Supreme Court decision making is very much a product of its times and, as such, there is little question that the American people play a significant role in the shaping of constitutional values. Elections, after all, determine who controls Congress, the White House, and much more. The American people, therefore, play an important role in shaping interactions between the judiciary and the other branches, including the determination of who is nominated and confirmed to the Supreme Court.  For example, Franklin Delano Roosevelt transformed Supreme Court decision making by appointing four pro-New Deal Justices from 1937 to 1939; likewise, the Rehnquist Court’s revitalization of federalism was tied to judicial appointments by Ronald Reagan and George H. Bush.

Furthermore, the Court is not immune from changing social norms and it is to be expected that the Justices’ opinions will eventually reflect changing social conditions.  Consider, for example, the nexus between the 1960s’ women’s movement and the Court’s increasing receptive­ness to constitutional attacks on gender classifications. Before 1971, the Court had never invalidated a gender classification under the Equal Protection Clause. By 1976 (with five Nixon and Ford appointees on the Court), the Court had deemed gender a problematic classification—a shift that matched profound change in gender roles, including the doubling, from 1940 to 1960, of the number of women working outside the home.

At the same time, we do not think that public opinion has a significant direct effect on Court decision making. The fact that a Court decision matches the majority view among the general public does not mean that the Court, in fact, took public opinion into account; likewise, Court decisions may diverge from public opinion even though they are shaped by social and political forces. More to the point, law professors and political scientists need to identify with some specificity whether majoritarian judicial review is tied to elected government pressures, changing norms over time (sometimes reflected in the appointments process), or public opinion. For this reason, although we agree with many of the specific claims (by Barry Friedman, Jeff Rosen, and others) about the majoritarian nature of judicial review, we disagree with the broader claim that modern Court decision making is directly influenced by public opinion to any substantial degree; rather, we believe that the effect of public opinion on the Court is primarily indirect. For example, the Democratic Senate’s rejection of Robert Bork’s Supreme Court nomination and Ronald Reagan’s subsequent nomination of Anthony Kennedy directly influenced judicial decision making; the voters who elected Ronald Reagan and Senate Democrats indirectly influenced Supreme Court decision making.

 
II.
The Social Psychology of the Justices

The belief that public opinion affects Supreme Court decisions rests heavily on the belief that Justices are solely interested in making good law, good policy, or some combination of the two. As many scholars see it, the Justices respond to public views because they are concerned with the Court’s efficacy as a maker of legal policy. According to this view, lacking concrete sources of power, the Court depends on its public legitimacy. Insufficient legitimacy will lead to negative consequences, including poor implementation of the Court’s decisions and attacks on the Court and its powers by the other branches of government. As a result, the Justices are hesitant to adopt lines of decisions that diverge sharply from public opinion or to engage in practices that conflict with public expectations of the Court.

The premise that Justices seek to advance policy and/or legal preferences is often accepted reflexively, without any consideration of the Justices’ potential interest in harmonious relationships with other Justices as well as power, prestige, reputation, self respect, and the other satisfactions that people seek in a job. For our purposes, however, it is more important to think about motivation at a deeper level.  Whatever goals the Justices seek to advance, there must be a motivational basis for that goal.

The social psychology model—which we embrace—emphasizes the basic human desire to be liked and respected. To what extent do Justices care about the esteem of the general public, and to what extent do they care about the esteem of groups that consist of people who are political and social elites? The answer seems self-evident. Like others, Supreme Court Justices want most to be liked and respected by people to whom they are personally close and people with whom they identify. For the Justices, those people are overwhelmingly part of elite groups. “Except for Justice Thomas,” as Judge Richard Posner observed, “the current Justices of the Supreme Court grew up in privileged circumstances and do not rub shoulders with hoi polloi.”² More to the point, because the Justices come from elite law schools, are overwhelmingly upper-middle-class or upper class, and travel in social and professional networks dominated by elites, the views of social and economic leaders are likely to matter more to the Court than to popularly elected lawmakers (who must appeal to popular sentiment in order to win elections).

None of this is to say that Supreme Court Justices will vote against sincerely held policy preferences in order to win favor with elite audiences.  It is to say that Supreme Court Justices are also interested in power and reputation and, for this reason, a Justice’s preferences and votes—consciously or unconsciously—are influenced by audiences they care about. Unlike political science models that argue that Justices will calibrate their decision making to stave off politically costly public disapproval, the social psychology model highlights the pivotal role that personal motivation plays in judicial decision making. Social psychology anticipates that the formation of legal policy preferences is driven by both ideological and personal motivations, so there is likely to be considerable agreement between Justices’ preferences and the preferences of the audiences that are most important to them. In contrast, any mechanisms that lead to agreement in preferences between the Justices and the general public are likely to be weaker.

 
III.
Analyzing the Empirical Evidence

What then of the empirical evidence?  Does it back up our claim that the Justices will respond more to elite groups in American society than to the general public?  We think so for three different reasons. 

First, contrary to the claims of many political scientists, the Court has little reason to moderate its decision making in order to preserve its effectiveness as a policy maker. Fundamental support for the Court—support that is captured by the concept of legitimacy—is strong and robust, and it is not fragile in the sense that negative reactions to the Court’s decisions threaten it. Not surprisingly, disagreement with the Court’s decisions may have negative effects on “specific support” for the Court, which focuses on the Court’s decisions or membership. However, these effects tend to fade over time.  More relevant to our concerns, even strong public opposition to decisions has little potential to erode the Court’s “diffuse support”—that is, its basic legitimacy. Consider, for example, the evidence we have on public reactions to Bush v. Gore.³  Rather than undermine the Court’s institutional status, Bush v. Gore had little impact on the Court’s legitimacy, even among members of the public who were unhappy with it.      

Second, there is little reason to think that the general public exerts much influence on the Justices.  This conclusion is supported by evidence on the agreement between the Court and the public and evidence on whether the Justices seek to align the Court more closely with public opinion.  Most significant, the Court and public disagree around 40 percent of the time, including some highly visible and salient issues, and on some issues in which the divergence is sharp. Examples include flag burning (on average, about three-quarters of the public disagreed with the Court in surveys in the two months after the decision), school prayer (in two surveys over the decade after the 1962 and 1963 rulings, about 70 percent disagreed), and eminent domain (a survey after the decision found 81 percent disagreement).

It is, of course, possible that the Justices do not know that their rulings are at odds with public opinion.  Yet, even after learning that their initial ruling was unpopular among the public, the Justices often adhere to that ruling.  Examples include school prayer, flag desecration, school bussing, and the use of the death penalty for a person convicted of the sexual assault of a child.   More than that, instances in which the Court shifts over to a popular position are often tied to lawmaker pressure or judicial appointments.  In other words, public opinion seems to play an indirect, not direct, role in explaining shifts in judicial decision making.

Another way in which the Justices might respond to public opinion is to adjust the overall ideological tenor of their decisions in response to shifts in public opinion. As the public becomes more liberal or more conservative, the Justices might move in the same direction in order to avoid endangering their public standing by creating the impression that they are out of step. Several studies have analyzed whether the Court is responsive to the public in this sense. Taken as a whole, these studies suggest that public opinion indirectly impacts judicial decision making.  For example, as noted earlier, shifts in Court doctrine on gender classifications reflected larger trends in society.  In this way, the Justices were not responding to public opinion; instead, their policy and legal preferences had changed in ways that matched larger social forces.

Third, opinion poll data and measures of the ideological shift of Justices over time both suggest that the Court is influenced by elites, especially left leaning journalists and academics. To start, people with high levels of education differ considerably in their opinions from people with less education. In the current era, the Court’s doctrines on controversial social issues are more consistent with the views of highly educated people than with the views of the populace as a whole. This is true of issues such as gender equality, sexual orientation, abortion, school prayer, flag burning, and affirmative action. On each of these issues, people with more education are more likely than other Americans to take positions that are typically identified as liberal. In each instance, by varying margins, the most highly educated group was more favorable to the Court’s position around the time of the ruling than was the remainder of the population. For example, 41.4 percent of individuals with education beyond an undergraduate degree supported the Court’s school prayer ruling; 14.9 percent of those with lower levels of education supported the decision.  On flag burning, the gap was 44.1 percent to 14.4 percent; on enemy combatants, 50 percent to 32.7 percent.

Evidence of Republican appointees to the Court veering left during their Court tenure is more striking, suggesting that the media, legal scholars, and leaders of the legal profession have helped influence some Justices.  On civil liberties cases that received front page coverage in The New York Times, changes in the Justices’ voting records are quite stark.  A comparison of the first two terms of a Justice’s tenure to the fifth through tenth terms reveals that the following Republican appointees have significantly increased their percentage of liberal voting: Warren (17%), Blackmun (15%), Powell (12%), O’Connor (14%), Kennedy (34%), Souter (20%).  And while other factors undoubtedly contribute to this pattern, these findings are consistent with psychological theory.

 
IV.
Conclusion

Supreme Court Justices enjoy a high level of independence from their political and social environment. Neither mass public opinion, the views of relevant elite groups, nor any other segment of the world outside the Court has control over the Justices’ choices. Because of that independence, the most powerful determinants of the Court’s decisions are the Justices’ own concep­tions of good law and good policy.

Even so, to a great extent the Court is a majoritarian institution, in that its policies tend to coincide with the preferences of policy makers in the other branches of government and those of the country as a whole. This tendency results from several different processes, including the appointments of Justices, pressures on the Court from Congress and the Executive Branch, and the effects of societal developments on the Justices’ thinking.

Scholars frequently identify another source of majoritarianism, the direct influence of the general public on the Justices. That influence is thought to derive primarily or solely from the Justices’ concern with their legitimacy. For reasons discussed above and in much greater detail in our published article, we think the legitimacy rationale is unpersuasive.  The Justices have little incentive to follow the will of the people and the Court as a whole has demonstrated considerable independence from public opinion.

In contrast, the Justices have strong incentives to maintain their standing with the elite audiences that are salient to them. Fundamentally, those incentives derive not from concern about support for the Court as an institution but from the human need for approval from individuals and groups that are important to them. Because the individuals and groups most salient to the Justices are overwhelmingly from elite segments of American society, it is the values and opinions of elites that have the greatest impact on the Justices. This is one important reason why Court decisions typically accord with the views of the most educated people better than they do with the views of the public as a whole. More to the point, the Justices advance their personal preferences by attending both to their preferred vision of legal policy and to the reference groups that matter most to them. Consequently, although the Justices will not diverge sharply from policy positions they strongly favor, the departures they do make are more likely to reflect their personal reference groups than the popular will.

Acknowledgments:

Copyright © 2010 The Georgetown Law Journal

Lawrence Baum is a Professor of Political Science, Ohio State University;
Neal Devins is the Goodrich Professor of Law and a Professor of Government, College of William and Mary.

As a descriptive matter, I take Cuéllar to be identifying a paradox in both the modern and historical task of homeland security.  The need for security is perceived to involve strong and serious legislative delegations; a check on that security tends to come not from the courts, nor from the usual strictures of administrative process, but from Congress itself.  And so, he observes, a massive reorganization of the security bureaucracy tends to result in a massive increase in congressional oversight.  But the paradox lies not only in the strange balance between broad delegations and close supervision.  The problem, it seems to me, also involves questions of institutional competence.   Congress is not adept at the mundane task of agency supervision—at least not always so; proof of this lies in its willingness to delegate a great deal of day-to-day supervision to the courts and the public, through notice and comment and “fire alarm” notifications, as McNollgast has explained.² Even when Congress does get involved, the expansive legal powers granted to these security superagencies can give Congress less of an angle for the kind of close supervision it perceives as necessary (though this problem is less severe for Congress than it is for the courts, who must defer to broad legal delegations).

I also understand Cuéllar to be identifying a trap for an unwary Congress in broad delegations that Presidents go on to define—sometimes aggressively, as Franklin D. Roosevelt began to do with the FSA and as George W. Bush did with DHS.  Congress, in Cuéllar’s view, needs to think carefully about the decision to create a broad delegation, given that missions of such agencies have a way of evolving.

Second, Cuéllar is arguing that the technique of bureaucratic reorganization can, in fact, serve a purpose.  At least from Roosevelt’s perspective, the creation of FSA served policy goals; by combining the agencies, Cuéllar argues, the Roosevelt administration could better control them.   To this end, the FSA is an interesting data point, but the usefulness of central control is still not clear.  After all, following Hurricane Katrina, President Bush was criticized for having placed FEMA in DHS.³ In my view (and in the view of others), the reorganization distracted FEMA’s attention from national disaster preparation, making the agency’s response to the hurricane less effective.  Centralizing many bureaucratic functions in one agency can make the agency unwieldy and impossible to supervise, rather than docile and responsive to political oversight.  The example of an agency that did not groan under its own weight is some evidence to the contrary—but the FSA did not enjoy a long life.⁴  Rather than winning the day on this matter, then, I think that Cuéllar has opened an avenue for future research.

Third, Cuéllar observes that security can—and did—serve as an organizational principle for both the Department of Homeland Security and the old FSA.  Yet he notes that much of the political advantage of big security agencies lies in the malleability of the term “security.”

That “security” confers power is not new, but Cuéllar’s article usefully delves into some of the reasons why it is important.  Using the example of the FSA, he argues that claims of security can shape public perception and motivate legislators to support an administration’s priorities.

But I would like to spend the most time in this Essay worrying about Cuéllar’s final critical point.  That point involves the redefinition of security that comes with a reorganization.  As Cuéllar explains, the Roosevelt administration spent significant capital on the FSA because it believed that the agency could, by defining security expansively, contribute to health, education, and public welfare as well as to domestic and international security.  The modern-day DHS, by reaching so broadly into state, local, and national law enforcement and by integrating immigration, customs, counterterrorism, and drug enforcement, among many other things, also contains more than a whiff of the suggestion of total war.  And total wars are worth fighting only if absolutely necessary.  I think that actual domestic security almost always involves more bureaucratic slicing and dicing than it does consolidation.  And in the same vein, although security and social welfare are linked in grand theory, the best practice, endorsed by most modern bureaucracies under most conditions, is to keep social programs separated from the national defense.⁵

I think this separation is generally a good idea, and I think that it is an idea that was challenged by the FSA and continues to be challenged by DHS and the War on Terror, to little good end.  Today, considering the psychic space that terrorism occupies and the large budget appropriations available to agencies that can develop a War on Terror–based strategy, it is unsurprising that almost every agency has taken up the antiterrorism task.  None more so than DHS, of course, but the point here is that modern agencies are mimicking DHS rather than separating their goals from its goals.  In addition to creating a modern counterpart to Roosevelt’s security superagency, the Bush administration and Congress have reimagined existing agencies in terms of their roles in securing Americans against terror.  And so environmental protection has developed an antiterror component, as has the provision of housing services.  These new regulatory responsibilities have been difficult for agencies to handle, suggesting that a sober reevaluation of the involvement of civilian agencies in counterterrorism would be a good thing.

I think there are three reasons why agencies often fail at dealing with national security when they have otherwise been tasked with handling other questions of economic security and personal well-being.  First, there is a problem of fit—that is, the problem of using civil rules to find and deter terrorists, perhaps the quintessential uncivil actors.  Agencies often deal with economic security by extending benefits, but on conditions, such as granting licenses to financial institutions in return for voluntary compliance with reporting requirements.  But this typical mode of action is ill suited to reach terrorists who can opt out of regimes that depend on voluntary participation and who comprise a tiny segment of the public as a whole.   In Cuéllar’s terms, agencies like financial regulators may be good at one type of security (financial), but bad at another (national).

Second, these security-based antiterrorist measures diminish administrative effectiveness by going to extraordinary lengths to privilege agency discretion, thereby reducing agency accountability and, predictably, resulting in increasingly arbitrary, unreviewable agency action—a problem of overdiscretion.  It is a maxim of administrative law that the authority delegated to administrative agencies should be paired with safeguards on the abuse of that authority.  Accordingly, administrative agencies have traditionally operated publicly and openly, and usually pursuant to a tested and established framework of rules.  Agency rulemaking is governed by requirements for public notice and comment,⁶ while agency adjudication is subject to judicial review or, at a minimum, supervision by senior executive branch officials.⁷ But the administrative initiatives against terror use security concerns to justify changes from what have traditionally been participatory, reviewable rulemaking or adjudicatory processes to singular acts of discretion that are often undertaken in secret and thus effectively insulated from public view and from judicial or even supervisory review.  Furthermore, these measures often place this decisionmaking authority in the hands of midlevel or even street-level bureaucrats, such as office directors in the Department of the Treasury in the case of the terrorist-financing programs.  The allocation of discretion down to bureaucrats all but insulated from oversight has, at least in the case of antiterrorism regulation, become a license for arbitrariness.

Third, security concerns have led to the expansion of agency powers to regulate beyond areas of agency expertise.  Since 9/11, our bureaucracy has folded new industries into its regulatory purview and has adopted new investigative and rulemaking responsibilities—often responsibilities that are difficult to distinguish from criminal law enforcement.  Max Weber posited that bureaucracies would develop rational and task-specific expertise.⁸ But the new antiterrorism responsibilities of agencies have ignored this Weberian maxim.  Instead, agencies have been tasked with uncharacteristic, noncivil responsibilities, and have been told to fulfill those responsibilities without supervision.  The result has been predictably inexpert.  Security concerns may give agencies more power, but they do not guarantee that an agency will be able to use this power effectively.

As a result of these problems of fit, overdiscretion, and inexpertise, civil agencies have produced initiatives that burden proxy groups—most often the industries they regulate, but not terrorists.  This proxy problem means that the administrative war on terror overwhelmingly burdens law abiders who willingly participate in civil administrative schemes.⁹ Agency experience with regulation justified by national security confirms Cuéllar’s fears about its possible abuse.   Arguments of security seem to make it easier for agencies and executives to justify overreach, but the end result may be both inefficient and undesirable.

At bottom, Cuéllar contends that there is an implication from this contingent use of the security term.  He argues that we need a definition of security in the modern nation-state.¹⁰ But, even if we should worry about repurposing civilian agencies as parts of the security apparatus, perhaps what we really need is not a definition, but recognition that we need to pay closer attention to the many definitions of security.  It may be that defining the term is impossible—agencies like the Committee for Foreign Investments in the United States have found it impossible to define terms like national or essential security with any precision.¹¹ We must be careful that legal ideas designed to apply to narrowly defined problems of security are not applied to legal problems using broader definitions—or applications—of the same term.

Acknowledgments:

Copyright © 2010 University of Chicago Law Review.

David Zaring is an Assistant Professor of Legal Studies at the University of Pennsylvania.

First, we ought to look to the relevant values that collective action problems implicate. I argue that there is an economic and moral imperative to overcome collective action problems. Collective action problems stem from externalities—situations where market participants fail to incur the full cost or benefit of their activities. The canonical example is a factory where air currents export its pollution away to neighboring areas. Another example is vaccinations, where those who opt not to get vaccinated free ride off the benefit of the vaccinated person not getting sick. Externalities misalign people’s incentives, leading to either too much of a bad activity or not enough of a good activity. From an economic perspective, this market failure is an inefficient outcome. From a consequentialist perspective, this outcome is undesirable because it fails to maximize aggregate welfare.

The usual response to collective action problems is government intervention, which implicates the competing moral value of autonomy. Governments can force people to internalize their externalities through the state’s power of the sword and purse, realigning individuals’ incentives to produce the efficient market outcome. And higher level governments can force lower level governments to do the same. But the mere existence of different levels of government implicitly suggests that certain polities are better equipped to handle certain problems. And the notion that government intervention is not always the best response suggests that in some cases there may be better ways to solve collective action problems.

Therefore, second, we ought to consider the question of institutional choice. As Ronald Coase famously observed,¹ free market participants can sometimes overcome collective action problems on their own through bargaining. The underlying predicate to efficient Coasian bargaining, however, is low transaction costs. Some externalities such as air pollution are widespread, making it costly to identify the affected parties and thus leading to high transaction costs. As externalities grow in scale, individuals might organize and form neighborhood organizations, labor unions, or other private institutions to overcome the mounting costs of bilateral contracting. But when the number and complexity of resource users and affected parties reach a certain threshold, government regulation may become the most efficient, and possibly only, means of overcoming a collective action problem. Given the possibility of both public and private forms of collective action, we should look for a guiding principle to discern when each is best.

We should consider the European Union’s principle of subsidiarity as this guiding principle for institutional choice. Subsidiarity is a constitutional principle that establishes a presumption in favor of local regulation, either public or private.²That presumption is rebuttable, however, when collective action problems render local regulation ineffective. In such situations, subsidiarity not only admits but demands the intervention of a higher level polity. This principle ideally balances our relevant moral values: The presumption in favor of local regulation encourages efficiency and preserves autonomy, while the imperative for higher governmental intervention to address collective action problems maximizes social welfare.

Finally, we should apply subsidiarity to the global arena. In the face of global collective action problems, nation states are ill-equipped to optimize social welfare individually. Moreover, existing international institutions—­such as the United Nations, World Trade Organization, and International Monetary Fund—­are unable to achieve the necessary level of cooperation because they are underinclusive and fundamentally lack the coercive force of a true world government. This balkanized state of the world morally compels global governance to coordinate and enforce collective action and optimize social welfare. While demanding global governance, however, subsidiarity would also cabin that power. Its presumption in favor of local regulation would protect sovereignty to a reasonable extent by recognizing sovereignty as intrinsically valuable as a matter of autonomy and instrumentally valuable as a matter of efficiency. Thus subsidiarity can alleviate the concern that global governance would entail global despotism.

The world needs a world government. Existing political and private institutions cannot solve global collective action problems like climate change or systemic risk in the world financial system by themselves. And the argument that a world government would erode national sovereignty is no longer compelling enough to dismiss the idea out-of-hand. Subsidiarity as an organic, legitimizing principle for global governance would both compel and limit a world government. Its ability to account for diverse forms of public and private collective action make it an ideal guide to global institutional choice that optimizes social welfare while preserving national sovereignty, a balance that is economically efficient and morally desirable.

Acknowledgments:

Copyright © 2010 NYU Law Review.

Frederick J. Lee received his JD from New York University School of Law in 2010.

I.  Hasen’s Case for the Democracy Canon

Hasen defends the Democracy Canon chiefly on the theory that it protects constitutional norms which the judiciary cannot or will not fully enforce in constitutional cases.³

Underenforcement arguments for canons of statutory interpretation conventionally rest on what Mitch Berman has helpfully labeled the “two output thesis” about the nature of constitutional adjudication.⁴  This thesis holds that in making constitutional law, judges first determine the meaning of the relevant constitutional “operative proposition,” and then translate that operative proposition into a workable “decision rule” for courts to follow in deciding cases.⁵  If the considerations that weigh in favor of an underenforcing decision rule with respect to a particular issue of constitutional law do not apply with equal force when judges are interpreting statutes, then the fact that the operative proposition is underenforced in constitutional cases may weigh in favor of a substantive canon of statutory interpretation that helps to give effect to the proposition.

Hasen’s “underenforcement” argument for the Democracy Canon does not follow this script.⁶  As best I can tell, it rests on the curious notion that when the U.S. Supreme Court errs in interpreting the Constitution, that error should be corrected or counterbalanced through constitutionally informed statutory interpretations which rest on a different understanding of the relevant operative proposition or its proper application (given a fully enforcing decision rule).  His is an argument premised on constitutional misinterpretation, not underenforcement. 

This is apparent from Hasen’s two examples of putative underenforcement.  He points, first, to the Supreme Court’s failure to treat the right to vote as “per se” a constitutionally protected right.⁷  Here, Hasen is clearly objecting to the Court’s understanding of operative propositions associated with the individual right to vote—specifically, that the Equal Protection Clause does not require any offices to be made elective—rather than to decision rules that the Court has prescribed for adjudicating alleged deprivations of the right. 

Hasen next turns his attention to Bush v. Gore’s maxim that, “[h]aving once granted the right to vote on equal terms, the State may not, by later arbitrary and disparate treatment, value one person’s vote over another’s.”⁸  Until recently, a strong basis existed for believing this proposition to be underenforced.  Governing doctrine held that “severe” burdens on the right to vote resulting from the mechanics of the electoral process were subject to strict scrutiny, whereas “lesser” burdens received much more deferential review⁹—a standard that some lower courts deemed equivalent to the “anything passes” rational basis test applied to ordinary social and economic legislation.¹⁰  The rational basis test is a canonically underenforcing judicial decision rule.

 In the 2008 case of Crawford v. Marion County Election Board,¹¹ however, the Supreme Court took a major step toward full enforcement of the individual’s right to vote on equal terms with other citizens.  Though Crawford yielded no majority opinion, six Justices agreed that assertedly unequal burdens on voter participation are subject to a kind of open-ended reasonableness review with bite.¹²  There is no rational-basis free pass for non-severe burdens.  After Crawford, judges hearing Equal Protection challenges to election procedures must satisfy themselves that the procedure at issue does not unreasonably value one person’s vote over another’s, all things considered.  Like any other observer, Hasen will disagree with many judicial applications of this standard.  But, a de jure gap between operative proposition and decision rule no longer exists.

The notion that canons of statutory interpretation may be used to correct the Supreme Court’s constitutional errors seems to me neither useful nor legitimate.  For purposes of cases before the Supreme Court, the argument is incongruous: why would the Justices accept, for purposes of a statutory case, a reading of the Constitution that they have just rejected in a constitutional case?  And for cases in the lower federal and state courts, the argument seems insubordinate, as these courts have a duty to abide by the Supreme Court’s reading of the Constitution. 

II.  A Pragmatic Case for the Democracy Canon?

Setting aside the niceties of legal theory, one might think that Hasen’s Democracy Canon is attractive because of its propensity for generating good results.  But there are large difficulties with a results-based argument for the Canon. 

For starters, the values that the Canon privileges often conflict with other democratic values, making it very hard to say whether the Democracy Canon in fact supports the “good result.”  Political scientists have shown, for example, that reforms which make voting easier—a Democracy Canon value—sometimes exacerbate the demographic skew of the voting public, i.e., the demographic unrepresentativeness of the population that does vote, relative to the population that is eligible to vote.¹³ Should this be considered a good result?  Likewise, enabling more candidates to get on the ballot—a Democracy Canon value—may usefully expose voters to new ideas, but it also increases the cognitive burden on voters and the likelihood that the Condorcet winner (a candidate who would prevail in a head-to-head contest with every other candidate who is seeking the office), if any, will end up losing the election.  In post-election disputes, legal interpretations that classify more ballots as eligible to be counted—a Democracy Canon value—may be satisfying to voters who feared that their ballots would otherwise go uncounted, but the same interpretations may well prolong the dispute, gumming up political transitions or leaving citizens temporarily without representation.  Good result? 

A further reason for pragmatists to worry about the Democracy Canon is that it arms one side (the Democrats) in the ongoing conflict between Democrats and Republicans about whether “barriers to voter participation” or “risks of voter fraud” represent the greater threat to American democracy.¹⁴ 

The Democracy Canon, in Hasen’s formulation, enables voters “not morally at fault” to participate and have their ballot counted.¹⁵  Yet, what qualifies a voter as innocent depends on one’s normative judgment about what the state may reasonably demand from citizens as a prerequisite to voting.  This question divides Democrats and Republicans in the current “access vs. integrity” debate, echoing earlier divides between liberals and conservatives in clashes over literacy, tax-paying, and property qualifications for voting.  Given this intellectual schism and its apparent correspondence with narrow partisan interests, it would be quite surprising if Democratic and Republican judges were able to converge on shared understandings about when the Canon is properly triggered (that is, whether a voter is “innocent”) and how heavily the Canon weighs in the run of cases. 

More likely, recognition of the Democracy Canon would increase both the partisan gap in federal judicial decision-making and the media drumbeat concerning judicial partisanship in election cases.  The judiciary’s capacity for issuing authoritative decisions in disputed-election cases, itself a function of public confidence in the courts’ neutrality, could suffer accordingly. 

A pragmatist should also worry about the dynamic consequences of Hasen’s Democracy Canon for enacting electoral legislation.  In the wake of Bush v. Gore, Congress adopted the Help America Vote Act (HAVA)¹⁶ on a bipartisan basis.  HAVA strikes a delicate balance between Democrats’ desire to make voting systems more accessible and Republicans’ stated wish to make the mechanics of voting less pervious to fraud.  Since Congress adopted HAVA, voting-rights advocates have brought repeated legal challenges seeking, in effect, to expand the “Democratic” parts of the law and curtail its “Republican” components.  For the most part, the federal courts have respected the gist of the legislative deal.  But, if the federal courts were to adopt the Democracy Canon, left-leaning judges would have a respectable doctrinal basis for unraveling HAVA’s bipartisan compromise. 

Imagine how Republican Senators and Representatives would behave if they knew that liberal judges could trot out a special “pro voter” canon of interpretation to construe the inevitable imperfections of legislative drafting in a manner that undermines the legislative deal.  They would fight tooth and nail against bills that even modestly liberalize the terms of voter participation, insofar as such liberalization might be thought to benefit traditional Democratic constituencies.

The harder it is to enact electoral legislation under conditions of divided government, the more justification there will be—due to the accumulation of unaddressed issues—for enacting reforms when the planets align and one party finds itself in control of the House, the Senate, and the Presidency.  Controversial electoral reforms that a unified government enacts are likely to be seen by supporters of the out-of-power party as measures designed to secure partisan advantage, even if the reforms have plausible neutral rationales.  If the minority party then loses the next election or elections, its supporters’ consent to the legitimacy of the winners’ rule will be that much harder to secure.  Over time, a two-party system in which the rules of electoral competition are regularly updated in a generally bipartisan fashion seems likely to be more stable than a system in which the rules remain static for long periods and are updated in partisan bursts whenever one party controls the legislative and executive branches.

In summary, there is little for pragmatists to find attractive in Hasen’s Democracy Canon.

III.  A Better Alternative: The Effective Accountability Canon

Though the federal courts nowadays fully enforce citizens’ equal protection right to vote on equal terms with others and candidates’ and political parties’ First Amendment rights of ballot access, other constitutional norms concerning the democratic process are unquestionably underenforced.  The most important of these is the effective accountability norm, which, I contend, is embodied in the Guarantee Clause of Article IV, Section 2 of Article I,¹⁷ and the Seventeenth Amendment.¹⁸  Article I, for example, specifies that members of the House of Representatives are to be “chosen . . . by the People” of the respective states, and that the electors who participate in this choice are to have the requisite qualifications to vote for the most numerous branch of their state’s legislature.¹⁹  This implies, first, that the qualifications for voting in elections for that state legislative body must be liberal enough to give the persons qualified to vote a fair claim to speak on behalf of the entire citizenry. 

It further implies—if “choice” is not to be an empty formality—that the electoral process must be structured so as to facilitate a meaningful expression of the qualified electors’ will.  Of particular concern in this regard is how election law affects (1) the degree to which the persons who turn out to vote are representative of the normative electorate (qualified voters) as a whole; (2) the aggregate competence of the voting public in apportioning blame retrospectively and identifying those candidates who are most likely to act as the voters—if fully informed—would wish for them to act; and (3) the ease of coordination among like-minded voters.  These are the constituent parts of democratic accountability.  A democratic constitution ought to establish an effective accountability norm, something to this effect: “An election law, or suite of election laws, is unconstitutional if there are practicable alternatives that would result in substantially more effective accountability to the normative electorate at reasonable cost.” 

Today, courts do not enforce this norm as a matter of positive constitutional doctrine.  The Guarantee Clause²⁰ has long been treated as nonjusticiable, and, though the Supreme Court once flirted with the idea of enforcing an effective accountability norm under the guise of voters’ equal protection rights and candidates and political parties’ associational rights, the Court has backed away from this.²¹ 

The Court may well have feared that direct enforcement of the effective accountability norm would make virtually every aspect of the electoral process a potential target of constitutional attack by plaintiffs arguing that some other (radically new?) mechanism would result in a better informed electorate or more representative voter participation.  In resolving these constitutional challenges, the courts would have to wade through disputes among political scientists about the actual or likely effects of alternative institutional arrangements.  The Court has repeatedly signaled that it is uncomfortable with social scientific approaches to constitutional political rights²²—perhaps because it fears making embarrassing mistakes, or because it does not want constitutional requirements to vacillate with the latest research findings and counter-findings.   

A canon-based approach to the effective accountability norm would not expose the courts to these perils, or at least not to the same degree.  Judges would not have to worry about finding limiting principles to defeat constitutional arguments for radical reform, because implementation of the effective accountability norm would occur only through the interpretive tweaking of legislative enactments.  The courts would be building on the legislature’s handiwork rather than displacing it. 

The “empiricism problem” would also be less acute.  Judicial mistakes would be subject to correction by the legislature or an implementing agency.  Additionally, the norm of super-strong statutory stare decisis would excuse the courts from the potentially embarrassing task of revisiting past decisions that allegedly were premised on misreadings of the social scientific literature.

Finally, liberal and conservative judges would probably find it easier to converge on a shared approach to the proposed Effective Accountability Canon than to Hasen’s Democracy Canon.  Judicial recourse to the effective accountability norm would neither require nor encourage courts to pass judgment on the “moral fault” of affected voters.  Also, the Effective Accountability Canon would have little purchase in post-election ballot-counting disputes.  Hasen notes that the large plurality of Democracy Canon applications involve ballot-counting disputes.²³  From an accountability perspective, who wins a razor-thin election is unimportant; the leading vote-getters have proven themselves more or less equally satisfactory to the electorate.  Because post-election litigation tends to be high visibility, with clear partisan stakes, anyone worried about the courts’ reputation for political neutrality should treat the fact that the Effective Accountability Canon would not license strained statutory readings in this context as a benefit.    

I do not doubt that liberal judges would be inclined to emphasize the “representative participation” side of the effective accountability coin, while their conservative counterparts would be comparatively alert to voter-competence issues.  That the canon legitimizes both concerns, however, provides some basis for hoping that an equilibrium would emerge in which liberal and conservative judges honor one another’s concerns in cases that implicate the canon.

Conclusion

Professor Hasen dubs the Democracy Canon the “Rodney Dangerfield” of canons, complaining that it gets no respect.²⁴  His terrific Article shows that the Canon deserves attention as well as respect.  Though he does not succeed in making the normative case for adoption of the Canon in jurisdictions that do not presently recognize it (most prominently, the federal courts), Hasen has performed a great service in bringing the Canon to the attention of legal academics and election-law practitioners.  My article and this editorial advance the ball a little further by explaining the limitations of Hasen’s normative defense of the Canon and by outlining some alternative models for a democracy canon.  My preferred alternative, the Effective Accountability Canon, would partially enforce Article IV’s guarantee of republican government, which is at once the Constitution’s most significant democratic commitment and one which the courts have long treated as nonjusticiable in constitutional cases.       

Acknowledgments:

Copyright © 2010 Cornell Law Review.

Christopher S. Elmendorf is a Professor of Law at U.C. Davis School of Law.

This Article defends judicial issue creation as an essential means of protecting the judiciary’s role in the constitutional structure. As the third branch of government, federal judges are assigned the task of settling the meaning of disputed questions of law not just for the parties, but for all who must comply with the law. Furthermore, because federal judges operate within a common law system in which the precedent in one case establishes the law for all who follow, it is particularly important that those judges accurately state the meaning of the law. To achieve this end, courts must have the power to look beyond the parties’ arguments when failing to do so would lead to an inaccurate or incomplete description of the law.

I.
Law Pronouncement

Since Marbury v. Madison,³ federal courts have the recognized authority to “say what the law is.”⁴ If two parties with a stake in the matter disagree over the interpretation of a statute, regulation, or constitutional provision, courts resolve that conflict by publicly stating not only who wins the case, but also what the law means.⁵

Resolving disputed questions of law is one of the federal judiciary’s essential functions. Although Congress and the president take the lead by enacting statutes and promulgating regulations, their formal role in establishing the meaning of the law ends when courts are asked to determine how a law passed by the political branches applies to a specific case or controversy. Members of Congress may file amicus briefs or publish post-enactment legislative history, but those statements are customarily given no more weight than any other party’s opinion.⁶ Judicial decisions are not open to revision either by Congress or the president, no matter how strongly the political branches disagree with courts’ conclusions about the meaning of a law.⁷ The political branches can, of course, override a judicial decision with which they disagree through the constitutional mechanisms for enacting new law. Unless and until they do so, however, judicial pronouncements are the law for all the citizens to follow.

When the parties fail to fully and accurately describe applicable legal standards, the norm against judicial issue creation clashes with the judiciary’s law-pronouncement power. Because judicial decisions are objective statements about the meaning of law, not statements about how the parties subjectively interpret the law, courts must be able to take notice of legal arguments that the parties fail to see. If litigants could constrain courts through their own truncated or inaccurate depictions of the meaning of statutes, constitutional provisions, and the like, they could effectively wrest this power away from the courts, putting federal judges in the impoverished role of picking and choosing from among the litigants’ interpretations of the law, rather than from their own.⁸

II.
The Interpretive Process

Courts have not only the power to declare the meaning of a law but also the discretion to choose how to interpret it. Neither task should be taken over by nonjudicial actors. To maintain control over the interpretive process, judges must at times step in and add to or alter the parties’ arguments.

For example, if two committed textualist litigants present their divergent views of the plain meaning of a statutory text to an intentionalist judge, that judge can herself explore the legislative history and issue a decision that turns on that history.⁹ That proposition is relatively uncontroversial, because there is no new issue created, and thus no transgression of the norm against judicial issue creation. But what if the litigants fail to argue that the court must go beyond the plain text of the statute to avoid an absurd result, or neglect to cite another provision of the statute containing similar language that sheds light on the disputed provision,¹⁰ or refuse to argue that the court should adopt an interpretation that would avoid a constitutional question?¹¹ The party-presentation principle should give way when the litigants’ interpretive philosophy differs from that of the judge. Otherwise, litigants could force judges to apply the interpretive methodology the litigants prefer.

III.
Judicial Independence

Federal judges are carefully insulated from political pressure so that they can declare the meaning of the law free from outside influence. Judicial independence, and the respect for judicial decisionmaking that accompanies it, would be compromised if courts were required to rule on the law as it is presented to them, rather than as they believe it to be. Life tenure and salary protection ensure that federal judges cannot be threatened or coerced by litigants who want them to ignore specific statutes or to interpret constitutional provisions as the litigants prefer. Yet if courts are not free to engage in issue creation, litigants could accomplish the same results simply by omitting sources, claims, and arguments.

IV.
Precedent and the Common Law

The presumption against judicial issue creation is also incompatible with the power of precedent in a common law system. The federal courts of appeals issue decisions that apply not only to the parties before the court, but that also bind all the judges on that court and all the district courts within that circuit. Lower courts have no choice but to obey even wrongheaded decisions of their superiors. Although a court’s obligation to follow its own precedent is not unyielding, stare decisis is nonetheless a hard doctrine to overcome.¹² Every circuit court has adopted a rule mandating that a panel cannot overturn the decision of a previous panel absent an intervening decision by the Supreme Court.¹³ Even those courts with the authority to overrule precedent, such as courts of appeals sitting en banc and the Supreme Court, rarely upset settled law. Precedent that is viewed as mistaken will nonetheless be followed by these courts absent a “special justification.”¹⁴

Litigants can undermine the power of precedent in two ways. First, if litigants fail to fairly, completely, and accurately describe the law, judicial opinions may themselves contain flawed statements of law that will bind all who come after. Second, if litigants fail to cite and discuss binding precedent, they may evade its application unless the court raises the precedent sua sponte. In either case, allowing the parties’ incomplete presentations to taint judicial decisions is troubling in a common law system in which precedent controls the results in subsequent litigation.

Conclusion

For all of these reasons, federal courts must have the power to raise issues overlooked or ignored by the parties. Yet when judges exercise that power, they are often criticized for violating the norms of the adversarial system, under which the parties are assigned the task of framing the dispute for a passive decisionmaker who then decides the case on the parties’ terms. The criticism is valid when judges raise new issues unrelated to the litigation or decide cases on new grounds without first obtaining the parties’ views. Issue creation can be reconciled with the central tenets of the adversarial system, however, if judges only raise new legal issues when necessary to preserve the integrity of their law-pronouncement function, and if they are careful to structure the proceedings to preserve the parties’ central role.

Adversarialism requires that the parties have an opportunity for a dialectical exchange on the questions at issue in the case, allowing the judge to avoid becoming an advocate for one party or interest. But it does not demand judicial passivity in the face of litigants’ mischaracterization of legal standards. As long as courts provide an opportunity for the parties to respond to new issues (or allow amici or intervenors to do so when the parties decline), then courts can simultaneously protect their power to pronounce on legal questions and preserve the benefits of the adversarial system.

This Article does not contend that judges should be given the power to set their own agenda—a role for which politically insulated judges are ill suited. Judges should limit issue creation to situations in which the parties’ arguments misstate the law or deprive the court of its preferred interpretive methodology. In these circumstances, issue creation is necessary to prevent litigants from undermining the judiciary’s role in the constitutional structure, and it can be accomplished without compromising the essentially partisan nature of dispute resolution in the United States.

Acknowledgments:

Copyright © 2010 Duke Law Journal.

Amanda Frost is an Associate Professor at the American University Washington College of Law.

This Legal Workshop Editorial is based on the following article: Amanda Frost, The Limits of Advocacy, 59 DUKE L.J. 447 (2009).

Americans listening to one of President Franklin Roosevelt’s fireside chats on a cabinet-sized radio in the late 1930s could not have imagined the eventual birth of the Internet technology used to disseminate this Article. They would have been hard pressed to imagine the spectacular growth of East Asian economies, or perhaps even the fall of the Soviet Union. They might have been just as surprised, however, at what remains the same in the early twenty-first century. For all that has changed over the course of six or seven decades, in many respects Americans today share a common reality with their forebears from the late 1930s. First, their lives play out against a backdrop of insecurity: financial instability, natural disasters such as Hurricane Katrina, and potential external threats. Second, their government is characterized by the competition to secure control over the organizations that implement the laws that regulate markets and public health, provide services, manage security risks, and otherwise shape people’s lives. How these two dynamics affect each other remains central to the future of American public law.

President Franklin Roosevelt was perhaps bolder than most leaders of his day in recognizing that the modern nation-state was—and continues to be—in the business of providing security to its citizens. In the face of pronounced crises engendering a profound sense of insecurity among the public, the administration pursued a sprawling strategy of enacting financial, pension, health, and ultimately national defense policies aimed at reducing the risks that Americans faced in their lives.1 It also reshaped the federal government in far-reaching ways that, as we shall see, continue to affect America in the twenty-first century.

Twenty-first century America remains concerned about security—and rightly so. From the Sacramento River Delta to the electric power grid, our national infrastructure remains too vulnerable to terrorist attacks and natural disasters.2 A deliberate attack or a serious accident at any one of over a hundred chemical facilities could unleash a cloud of toxic gas harming over a million people.3 The International Atomic Energy Agency recorded over one hundred incidents of nuclear smuggling between 1993 and 2006.4 These threats reflect not only structural vulnerabilities forcing us to confront persistent risks, but also the fact that we face determined adversaries eager to do us harm. Though less commonly remarked upon in a post–Cold War world, geostrategic threats of a more conventional nature also remain a challenge, just as they were throughout the twentieth century. Russia’s military action in Georgia, which produced approximately 100,000 refugees,5 and the continuing conflict between drug cartels and the Mexican government, which killed over 5,000 people last year,6 are just two examples of developments with the potential to affect American interests. Domestic and international efforts to grapple with these problems sometimes raise important legal and policy questions in agencies such as the Department of Homeland Security (DHS) and the Department of Justice, and many such questions have received sustained attention in recent years.

Just as important are some questions lingering since Roosevelt’s day that have received far less scrutiny and lie at the fertile intersection of public law, organizational theory, and national security. How, for example, does security get defined, and what happens if the concept encompasses a range of disparate missions—as with terrorism prevention and natural disaster response in the case of DHS—that prove difficult to harmonize? How does organizational design affect the work of agencies charged with keeping us safe? And how is the evolution of the executive branch, playing out against the backdrop of political competition and legal questions about separation of powers, affected by debates about the nation’s responsibility to secure its citizens? These questions obviously mattered in recent history, as made plain by the already difficult history of the DHS. But unbeknownst to many Americans, our history foreshadowed many of the same dilemmas during an episode worthy of closer attention.

To see why, we must return to Roosevelt’s time and appreciate the following irony. During the 1930s, the Roosevelt administration spurred major growth in the federal state by stressing government’s role as guarantor of the nation’s security.7 With security as a lodestar, administration priorities led to now-familiar statutory changes catalyzing financial regulation, retirement and unemployment benefits, food safety policies, and energy rules. As the New Deal matured, security-related rationales taking subtly distinct forms—emphasizing international, geostrategic concerns—also bolstered the case for expansive federal power and even blended with the more expansive domestic risk-reduction ideas in the period before World War II. In 1939, for example, the administration wove together multiple strands of its security trope while using a sliver of legal authority for executive reorganization to forge a colossal new Federal Security Agency (FSA). It then proceeded to justify the executive branch’s new legal architecture by arguing that the ability to face international threats depended on the strengthened domestic capacity, provided by the FSA, to implement the law effectively in domains such as health and education.8

But for all its success reconstructing the national agenda around an expansive conception of security, by the late 1930s the administration was losing capacity to secure its own control of the outsized federal state it had created. In Humphrey’s Executor v United States,9 the Supreme Court refused to let the President fire a Federal Trade Commission official whose term had been fixed by Congress, thereby eviscerating presidential power over an ever-multiplying empire of independent commissions and opening the door to even greater congressionally imposed limits on presidential power.10 In the process, the Court rejected the view that proper presidential supervision of the executive branch under Article II depended on the power to fire senior officials, an idea central to the Court’s prior conception of executive power articulated a few years before in Myers v United States.11 Meanwhile, Congress was increasingly designing the structure of agencies like the Social Security Board to disrupt presidential control,12 independent of any executive department.”).] blocking White House staff expansion, and refusing to grant reorganization authority the Roosevelt administration considered essential to securing control of a rapidly growing federal state.13

It turns out that these security problems—the control politicians seek to secure over agencies with expansive legal powers, and the security that modern nation-states promise citizens when justifying why public bureaucracies must be given such powers in the first place—intersect. Time and again, whether the subject is the Roosevelt-era FSA or the Bush-era DHS, these two security problems turn out to be deeply enmeshed within the web of federal regulatory power. Bureaucratic control helps executive branch officials and their lawyers promote a particular definition of security through legal interpretations, public communications, legislative initiatives, and discretionary decisions. Security concerns, meanwhile, shore up public justifications for organizational changes affecting political control over law’s implementation. By understanding how these two problems intersect, we can grasp underappreciated tensions coursing through public law—such as how agencies shape public perceptions about the laws they implement, how the definition of “security” has changed as the architecture of the executive branch has evolved, and how to understand the consequences of forging a modern-day DHS.

The history of the FSA nicely illustrates how politicians exploit reorganizations, particularly during or in anticipation of national security emergencies, to reshape agencies’ legal mandates by controlling their bureaucratic power. Although the FSA has been all but forgotten, even cursory scrutiny reveals it to be among the more important bureaucracies created in twentieth-century America. The FSA was the gangly and occasionally brash adolescent—equal parts wartime soldier and audacious dreamer—that matured into the federal government’s sprawling health, welfare, and civil defense apparatus. The agency was born amidst a tangle of administrative changes enshrined in statutes as the New Deal morphed into the American response to World War II. Its litany of statutory responsibilities at once confirms what has today become a familiar picture of federal functions—encompassing medical research, civil defense, social security, federal education assistance, weapons development, and food and drug regulation. But the list also scrambles modern sensibilities about the line dividing conventional national security functions from domestic regulatory activities.

President Roosevelt began blurring that line nearly two and a half years before the Pearl Harbor attacks.14 On April 25, 1939, he delivered a long-expected announcement about his plans to reshape the architecture of the executive branch. The change in architecture had been on the President’s agenda for over twenty-four months, but the specific changes he had in mind had only become possible after Congress grudgingly gave the President limited reorganization powers three weeks earlier. Thwarted in an ambitious effort to create a cabinet-level Department of Public Welfare the previous year, the Roosevelt White House nonetheless announced in April that it would use its more modest reorganization power to unify a half-dozen bureaus involved in health regulation, economic security, and education in a new subcabinet Federal Security Agency. From then on, the FSA expanded steadily. By 1943, the FSA’s bureaus included the Public Health Service (PHS), the Social Security Board, the Office of Education, the Food and Drug Administration, the Office of Community War Services, a War Research Service, and nearly a dozen other organizations. By 1953, the agency had become the Department of Health, Education, and Welfare (HEW). And by the 1970s, HEW’s budget accounted for nearly half of federal nondefense expenditures, dwarfing the national budget of every country except Soviet Russia.15

To observers situated in the early twenty-first century, however, the name of the Federal Security Agency foreshadows DHS more than it does a welfare agency. Legal history readily demonstrates that the meaning of “security” is versatile, with the term eliciting concepts of economic risk reduction more easily in the 1930s than today. Some aspects of the FSA’s work, however, nonetheless fit readily with more modern applications of the term, presaging its subsequent evolution. It was the FSA that facilitated the resettlement of Japanese Americans. It was the FSA that laundered White House funds and funneled them into secret biological weapons research even when the United States had signed a treaty that should have raised, at a minimum, serious concerns about such activity.16 FSA officials presided over the rapid growth of a national system to train workers for war-related occupations. They set up recordkeeping systems to assist a national military draft. The agency’s inspectors prevented food contamination while insisting their mission was essential to the performance of the military, and they sought to limit the spread of sexually transmitted diseases among military personnel. And the agency performed these tasks while it continued—and expanded—its role of paying social security benefit checks, providing medical services to underserved American communities, screening new drugs, and printing books for the blind.17

As the FSA’s origins recede into history, however, scholars too have remained blind to certain puzzles about its birth, which shed further light on the intersection between organizational choices, legal implementation, and debates about the scope of national security. Why, for instance, did President Roosevelt create the FSA at all, particularly when doing so involved such an expenditure of scarce political capital, and resulted in the removal of some bureaus from agencies where they were already supervised by trusted political lieutenants? The meager scholarly literature on the subject, much of it written at the time of the merger or shortly thereafter, speculates that the President’s interest was in more “efficient” government without defining the concept or considering the more directly political implications of the White House move. Why did the agency so pervasively mix social welfare, regulatory, and national security functions years before World War II embroiled the United States? Indeed, what was meant by the reference to “security” used to justify expansive legal powers in the early years of the FSA? And how did the FSA’s creation impact the work of its bureaus?18 In one of the few scholarly references that are relevant to the subject, political scientist James Q. Wilson downplays the importance of the creation of HEW for the behavior of its component bureaus. But he does nothing to investigate the potential significance of the time those bureaus spent within the FSA, or the broader legacy of that agency.19

The answers to these puzzles implicate not only separation of powers and national security law, but also organization theory and the history of the administrative state. The key to understanding the importance of the FSA’s creation—as with DHS decades later—is recognizing that organizational changes can exert powerful, underappreciated influence on law’s implementation. First, public health bureaucrats work differently when buried in a Treasury Department dominated by fiscal concerns than when operating in an agency prioritizing health and economic security. Because organization is not neutral, the redistribution of authority within the executive branch can shape the law by facilitating a symbiotic burst of agency capacity-building coupled with presidential power to control that new capacity. Roosevelt’s creation of the FSA had major practical effects, and those effects went far beyond political symbolism. Archival records, news coverage, and White House memos describe how the new agency created a layer of bureaucratic appointees, allowing the President to have more control over important administrative agencies at a time when the FSA’s staff was meager and the agencies were previously either independent (as was the Social Security Board) or stuck in departments unsympathetic to their missions (as was the PHS under the Treasury). Roosevelt wanted the new agency to make it easier for him to control the flow of grant funds to states and local governments.20 The new layer of political appointees and lawyers allowed the administration to wring the maximum benefit out of broad legal authorities, to monitor developments in the bureaus, to harness the bureaus’ analytical capacities in the service of further legislative changes, and to ensure that they spoke with a more consistent voice to promote favorable public perceptions. In short, reorganization gave the White House more control, and more to control.

Second, agency architecture can help reshape public perceptions of the government’s legal responsibilities. Aware of the looming possibility of war, Roosevelt used his new degree of control over bureaucratic functions to frame discussion about the concept of “security”—defining it broadly enough to blur the distinctions between social services, economic security, health regulation, and geostrategic national security. Doing so served a political goal by giving moderate legislators skeptical of social programs but supportive of defense a new reason to support the FSA bureaus, and by reinforcing associations among many voters between national security goals and regulatory and social programs. With its new political and legal staff, its two-edged “security” mandate, and its relentless efforts to explain the essential importance of its work to the public, the FSA seemed to prosper during and after the war: it was able to keep and even grow its budget during a wartime period when other domestic agencies faced cuts in their budgets; it achieved expansions in its responsibilities (particularly in social security and health research) at a time when Congress was often hostile to the administration; and the public increasingly supported the transformation of the organization into a cabinet agency.

In retrospect, it may not seem remarkable to observe that the FSA’s creation allowed the administration to engage in an epistemic process of “framing” policy priorities by emphasizing their role in achieving the widely desired goal of “security.” In particular, developments regarding the FSA suggest the importance of two specific mechanisms—identified earlier in our discussion of refining existing theories—through which the blurring of the security concept could enhance the FSA’s prospects: one involves shaping the perceptions of the mass public about the meaning of security; the other involves the separate enlargement of legislative coalitions supporting agency functions by ambiguating the extent to which a vote for the FSA also constitutes a vote for national security or war-related efforts.

Both of these strategies depend heavily on demonstrating to legislators, organized interests, and the public at large that the legal mandates the FSA was implementing were inextricably connected to national defense and the war effort. Regardless of whether the Roosevelt administration wanted to enter the war at the time the FSA was created, the White House was increasingly cognizant of a foreign policy crisis that could further complicate its domestic political goals. As one historian observed recently, it was by March 15, 1939—just over a month before the reorganization creating the FSA was publicly proclaimed—that “foreign affairs achieved the absolute dominance over domestic affairs that they were destined ever after to retain in [Roosevelt’s] mind.”21 The impending foreign policy problems made the President increasingly anticipate that the nation could find itself embroiled in war:

The experience was, for him, not dissimilar in some essentials to that of the spring of 1933 when, amid universal ruin and collapse, he had presided over the birth of the New Deal . . . . (“Never in my life have I seen things moving in the world with more cross currents or greater velocity,” he wrote in a personal letter on March 25, 1939).22

Nor was the President alone, as some legislators began to favor repealing federal neutrality laws to facilitate American involvement in the European theater.23

The administration’s goal of emphasizing the connection between the work of the FSA and national defense became easier to achieve because of the importance to the military of the new agency’s activities. The FSA’s functions not only contributed to an expansive conception of security that encompassed ordinary health, education, and public welfare activities, but also served ends specifically connected to domestic and international security in the conventional sense. These included the relocation of Japanese-Americans, technical assistance to law enforcement agencies engaged in police work against juvenile delinquents, the aforementioned research programs in biological weapons and related areas, an antiprostitution enforcement program designed particularly to protect the armed forces, and the development of disaster assistance programs to be deployed in case of war-related attacks against civilians. In addition, the FSA emphasized the defense-related import of a host of other activities, ranging from vocational education to nutrition. Together, these presidentially driven choices afforded the administration with an opportunity to affect how the public understood the concept of security and how legislators understood the payoffs of supporting the FSA as the nation prepared for war.24

If it is true that injecting a substantial national defense ingredient into the mix of “security” bureaus could serve the President’s goals, why did the White House wait to pursue this strategy until it could order a bureaucratic reorganization? Although the type of rebranding Roosevelt sought to pull off by melding domestic policy and national defense through an expansive “security” metaphor may not have been impossible without reorganization authority, it would have proven far more difficult. Imagine, for instance, how much more trying it would have been for FDR to discuss his expansive version of security during fireside chats if the agencies carrying out that work were scattered bits and pieces across the government (for example, the PHS at Treasury, the FDA at Agriculture, and the Office of Education at Interior). In effect, the reorganization delivered three things that redounded to the benefit of the rebranding. First, the administration gained a high profile opportunity to announce changes and make a case to the nation about its conception of security. The newspaper coverage of the reorganization announcement was intense. Roosevelt’s “warning to dictators” when he reorganized was widely disseminated.25 Second, the administration put in place a structure—consisting of appointees to oversee bureaus with the legal authority to control what they did—to better monitor bureau activities, anticipate threats, and coordinate actions to advance the “expansive” security message. Finally, the administration gained a staff whose job was in part to promote what the bureaus were doing across the country, build alliances, and manage external relationships in a manner that promoted the desired conception of security.

Third, the story of the FSA shows the malleability of the “security” concept in relation to law.26 Parallel to the aforementioned developments, the Roosevelt administration’s melding of functions within the FSA proved a harbinger for a conception of security that became increasingly identified with the military and national defense, to the point where that powerful association swallowed up the more flexible conception that Roosevelt first championed. In effect, Roosevelt’s reorganization set in motion a process showcasing the connections between three dynamics: public debates about “security” as a metaphor for the responsibilities of the modern nation-state, changes in organizational structure to bolster a particular understanding of “security,” and political strategies to control the law’s implementation. Such contestation belies the idea of security as an unambiguous prescriptive rationale for legal changes, raising often-neglected questions about the scope of national security law. As presidents, lawmakers, courts, and the public struggle with those questions, the fight over “federal” security in the Truman years provides a provocative reminder that the notion of security—in part because of its deep connections to the underlying origins of the nation-state itself—should be subject to as much contestation as conceptions of democracy or citizenship.

Indeed, the current concerns with homeland security have increasingly come to encompass infrastructures and public health mechanisms easily framed by some lawmakers or scholarly observers as critical to national life. Although the creation of a Department of Homeland Security appears to have fomented cuts in domestic regulatory mandates, such a development does not necessarily signal the demise of “security” as an organizing principle for promoting domestic regulatory and administrative activity. It is worth noting that both the rhetoric and the underlying substantive concerns advanced by some observers and policy entrepreneurs in the homeland security arena bear more than a passing resemblance to the FSA’s mandates more than six decades ago. Their basic message is as simple as it is reminiscent of McNutt’s and Roosevelt’s speeches: a narrow focus on violent, manmade, geostrategic threats is a poor recipe for security, and even when the focus remains on those more conventional threats to national defense, success depends heavily on the nation’s human and regulatory infrastructure. Public health, education, and infrastructure protection can be seen as central to the nation’s security even if one is focused on the narrower, geostrategic version of the concept. In the national experience with the FSA, policy entrepreneurs may find hints about the viability of political coalitions supporting the development of bureaucratic capacity to achieve a blend of regulatory, redistributive, and more conventionally understood geostrategic national security goals.27

Yet despite the legal stakes of defining security in contexts ranging from application of the Homeland Security Act to the scope of deference to the executive, scholars of national security law rarely address or even recognize the fundamental question of how to define security in the modern nation-state.

Fourth, the problem of regulating organizational structure permeates—and perhaps inevitably defines—modern separation of powers.28 Presidential control of agency architecture—including who runs the agency, what bureaus are within it, how the public views those bureaus, and who (other than the President) runs the bureaus—can substitute for direct presidential power to command subordinate officials. The consequences of structural innovation, moreover, show robust “presidential administration” to be in fact a longstanding phenomenon, one that courts should regulate when policing the border between legislative and executive authority.

As certain courts and policymakers have realized over the years, many problems in the separation of powers doctrine involve questions about the amount of actual control a president can exercise over the bureaucracy. By the time of the Sierra Club v Costle29 decision, for example, courts routinely approached separation of powers questions by trying to calibrate precisely the extent of presidential power over internal agency matters.  In Costle, the court simultaneously acknowledged the value of judicial oversight of the President-agency relationship while recognizing that such oversight could also adversely impact the bureaucracy. Indeed, right after Humphrey’s Executor,30 the stage was already set for the rise of a more functionalist paradigm in separation of powers law. With its decision in Humphrey’s Executor, the Court simultaneously denied the White House a major instrument of control and ratified legislative experimentation with structures insulated from presidential control (for example, independent commissions).31

The White House responded to such constraints through a determined effort to gain the executive reorganization authority that eventually led to the creation of the FSA. Despite the difficulties created by decisions such as Humphrey’s Executor, the swelling size of the federal government relative to the size of the White House staff, and basic problems obtaining information across government, greater presidential success in achieving structural goals is likely to be associated with greater power to affect what federal bureaus actually do. Indeed, Presidents’ relative successes in achieving structural goals such as the creation of the FSA or DHS further blur a distinction—quite central to some otherwise cogent accounts of separation of powers—between presidential “oversight” and “directive authority.”32 True, directive authority implies that the president holds a special power to legally compel a decision from a subordinate, whereas oversight implies a power to force consultation and the production of information—something short of a specific decision. But in the absence of such explicit “directive” authority, presidential power to reorganize who holds directive authority within organizations (as Roosevelt did when he placed the Social Security Board inside the FSA), to appoint loyal political supervisors to bureaus, and to control the flow of information to and from bureaus can limit the significance of formal distinctions between “oversight” and “directive authority.”

Even if some subordinate executive branch officials let their responses to presidential requests turn on the distinction between oversight and directive authority, it is far from obvious that all or even most employees would be so passionately invested in the distinction. Structural changes can therefore help a president limit the significance of formal distinctions between oversight and directive authority. Accordingly, because separation of powers doctrine only makes sense if it encompasses some limits on presidential power, and structural arrangements are a key determinant of such power, courts should (other things being equal) closely scrutinize structural changes pursued by the White House. In fact, courts genuinely concerned with policing the extent of executive power will be left with little choice but to scrutinize the extent of structural power the president in fact has been able to accrue, rather than merely relying on a formal examination of whether the president has made claims of authority that improperly violate the distinction between oversight and directive authority.33

* * *

Regardless of how courts resolve the tensions inherent in supervising presidential control over the structure of the executive branch, Americans should appreciate how much the debates about the scope of national security end up affecting that structure. On June 7, 2002, President George W. Bush announced a major initiative reshaping the architecture of the federal government to promote greater security for the American people.34 DHS was the result. Unmistakable parallels link that initiative to Roosevelt’s creation of the FSA sixty-three years earlier. Like Roosevelt, President Bush faced a national electorate growing increasingly concerned about international threats. The early twenty-first century White House, like its predecessor in the 1930s, harbored an ambitious domestic policy agenda that would be affected by the reorganization. Both administrations faced hostility over their accumulation of presidential power,35 and nonetheless sought to use reorganization to enhance their control over how laws are implemented in a sprawling regulatory state. Both ultimately succeeded in achieving their respective reorganizations.

Where each administration differed sharply is in how it defined the concept of security that the newly strengthened legal architecture of government was supposed to serve. In Bush’s case, the reference to security primarily implicated the management of risks from terrorism or geostrategic threats, a narrowly focused mandate sharply conflicting with transferred bureaus’ broader missions and helping to create conditions making DHS perennially troubled.36 In Roosevelt’s case, the term security was meant to evoke a flexible conception of risk reduction that spread—as the FSA’s jurisdiction eventually did—across the now-segregated domains of public health regulation, social welfare policy, and national defense. Against that backdrop, early FSA officials managed to create an environment supporting their bureaus’ legal functions and adding to their resources rather than one calling for drastic reforms in agency priorities amid sharp resource constraints.37 Even after Roosevelt’s death, FSA Administrator Oscar Ewing continued articulating the same notion of security as “a sure knowledge that we shall not want for the basic necessities of life, no matter what Fate may have in store,”38 one that eerily parallels the views of some observers who criticize DHS for not being more steadily focused on the full range of risks facing Americans today.39

Today’s world of elaborate infrastructure problems, global nonstate actors, and mature regulatory agencies renders the historical context different from what prevailed when Roosevelt’s fireside chats were heard on cabinet-sized radios. The Bush administration’s narrow substantive definition of security, with implications that tend to cut against expansive regulatory activity in domains such as environmental protection or federal involvement in providing health services, is also different.40 But the cycle epitomizing fundamental conflicts over the architecture of law is not. Policymakers mold law by defining security, and then seek to command law’s implementation by securing control over public organizations. To assume that the idea of national security carries within it a set of self-evident priorities, free of strategic agendas or fraught disputes about separation of powers, is to ignore the history and shared questions that bind us to the Americans of the late 1930s.

Acknowledgments:

Copyright © 2010 University of Chicago Law Review.

Mariano-Florentino Cuéllar is a Professor of Law and Deane F. Johnson Faculty Scholar at Stanford Law School.

How do such commons work?  Where do they come from, what contributes to their durability and effectiveness, and what undermines them?  These questions are at the heart of an institutionalist research paradigm that has been extremely successful in understanding the successes and failures of natural resource commons arrangements.  The Nobel Committee recently recognized the importance of institutionalism by awarding  the 2009 Nobel Prize in Economics to political scientist Elinor Ostrom and institutional economist Oliver E. Williamson.

Constructing Commons in the Cultural Environment, our full-length article in the Cornell Law Review, confronts the challenge of understanding the governance of what we refer to as constructed commons in the cultural environment, in which the resources to be produced, conserved, and consumed are not crustaceans but information: copyrighted works of authorship, patented inventions, and other forms of information and knowledge that need not be aligned with formal systems of intellectual property law.  The phrase “constructed cultural commons,” as we use it, refers to socially constructed institutions for developing and sharing cultural and scientific knowledge in a formally or informally managed way, much as a natural resource commons refers to the type of managed sharing environment for natural resources exemplified by the Maine lobster fishery.

A commons is neither a place nor a thing.  Rather, a commons is a resource management or governance regime.  Cultural commons are regimes for managing the sharing of information or cultural resources.  Commons are “constructed” in the sense that their creation, existence, operation, and persistence are not matters of pure accident or random chance, but of emergent social process and institutional design.  Examples of constructed cultural commons include: intellectual property pools, in which owners of patents in a technological domain license their patents to a common “pool” from which producers of complex products can obtain all of the permissions needed to make and sell goods that use the patents; open source computer software projects, which offer users of open source programs the ability to create and share modifications to the programs; Wikipedia, which offers users of this Internet encyclopedia the power to add to and edit its contents; the wire service for journalism operated by the Associated Press, which allows individual member media outlets the opportunity to publish work produced by other members; and “jamband” fan communities, which record, share and comment on musical performances of their favorite groups—with the permission of the artists themselves.  The best-known jamband is the community that grew up around and that is still associated with the Grateful Dead.

Participants design these environments with limitations tailored to the character of the resources and communities involved. They do not operate solely via market transactions grounded in traditional proprietary rights, nor are they structured exclusively by government regulation.  Research on intellectual property and related cultural resources has generally failed to focus sufficiently on managed sharing or on the governance of cultural resources via collective mechanisms.  The theoretical discussion of intellectual property policy has been focused on extremes of exclusion and open access, ignoring a wide range of constructed commons that persist between the extremes.  Such discussion is often divorced from empirical studies of creative and inventive communities.  In Constructing Commons, we argue that it is high time to devote more attention to the middle ground of constructed cultural commons.

Research on the Maine lobster fishery and other natural resource commons is grounded in the empirical case study approach pioneered by political scientist Elinor Ostrom and her colleagues.  That approach employs an “Institutional Analysis and Development” (IAD) framework of structured inquiries to study a variety of commons arrangements before moving on to create theories and models to explain them.¹  Commons researchers divide their inquiries into nested groups.  A set of inquiries into “exogenous variables” is further divided into questions about the biophysical characteristics of the shared resources, the attributes of the community, and the “rules-in-use” or governance mechanisms.²  A second set of inquiries focuses on the “action arena” in which social interactions and exchange take place.³  Finally, each study inquires about the outcomes of the commons management system.

A simple illustration of the framework might be a soccer league.  The formal rules of soccer are fixed, but the rules-in-use clearly vary somewhat between a professional league and a recreational league, between children’s leagues and adult leagues, and so forth.  A specific soccer league is also characterized by the relationships among the players (neighbors, professional competitors, friends, etc.), by the attributes of the fields on which games are played, and even by the climate of the places where the games take place.  The action arena (soccer games) depends on complex and specific interactions among all of these characteristics.  Nonetheless, the outcomes over time in a particular league are the patterns of interaction that are clearly identifiable as “professional soccer,” “friendly weekend game,” “children’s soccer league” and so forth.  Moreover, some leagues may be successful, lasting for years even as players come and go, while others will fail.  The goal of applying the Ostrom framework of analysis in this context would be to use studies and analyses of many different soccer leagues to come to an understanding of success and failure as a function of specific context.

This method of structured inquiry has the advantages of a systematic approach without prematurely imposing any one theoretical paradigm on the study of commons.  It allows the complexity of real-world commons arrangements to inform the search for theoretical understanding rather than papering over such complexity in an attempt to shoehorn existing commons arrangements into a pre-existing model.  After engaging in a large number of such studies, Ostrom’s approach permits generalization (for example, with regard to design principles for successful commons) along with more specific theorizing, modeling, and even experimental studies of particular aspects observed in the case studies.

Borrowing from and building on Ostrom’s work, Constructing Commons develops and argues for the use of a similar framework to systematize case-study-based research exploring the construction of cultural commons.  The time is ripe for such an approach, as a number of scholars have begun to do case studies of constructed cultural commons.  To the extent that researchers have undertaken case studies so far, however, they tend to have studied isolated areas (such as open source software or academic publishing) and to have considered a limited number of descriptive variables.  This makes integration and learning from a body of case studies quite difficult, which in turn discourages people from pursuing further case studies.

Constructing Commons in the Cultural Environment adapts, extends and distinguishes Ostrom’s IAD framework to account for important differences between constructed cultural commons and natural resource commons.  Understanding the origins and operation of constructed cultural commons requires detailed assessments that recognize that they operate simultaneously at several levels, each nested in a level above, and that each level entails a variety of possible attributes.  We suggest a set of buckets or clusters of issues that should guide further inquiry, including the ways in which information resources and resource commons are structured by default rules of exclusion, and the ways in which members of these pools manage participation in the collective production and extraction of information resources.  Case studies across disciplines and reviews of existing literature that addresses cultural commons will help specify relevant attributes within each cluster.

Because space does not permit a detailed exposition of the framework here, we will briefly discuss only a few of the most important issues that distinguish the inquiries necessary for studying cultural commons from those appropriate to natural resource commons.  Most importantly, unlike commons in the natural resource environment, cultural commons arrangements usually must create a governance structure within which participants not only share existing resources but also engage in producing those resources.  This characteristic of cultural commons creates a more intertwined set of exogenous variables, since separating the managed resources from the attributes and rules-in-use of the community that produces them is impossible.   Moreover, in cultural commons, distinguishing outcomes from resources and community attributes is not strictly possible, since the interactions of the participants in such a commons are inextricably linked with the form and content of the knowledge output, which in turn is itself a resource for future production.  These differences call for a set of inquiries tailored to cultural commons.

Because the resources shared within a cultural commons are themselves culturally constructed and non-rivalrous, defining the boundaries of the commonly managed resource is also more complex than in the natural resource commons context.  A reference “natural environment” must be consciously chosen: either the public domain or a proprietary intellectual property environment may be most appropriate depending upon the particular commons (e.g., university research community or patent pool) under investigation.  Nuanced questions about openness are in order.  In natural resource commons, in many cases, the commons is open to members and closed to everyone else, and that is the end of the story.  This is sensible because natural resources are rivalrous—preventing over-consumption is usually the goal of the commons arrangement.  Intellectual resources, by contrast, are not subject to the same natural constraints and are naturally shareable without a risk of congestion or overconsumption.  Thus, a constructed cultural commons arrangement reflects many choices about the degree and type of participation that is available to various persons and entities.  Open source software projects, for example, often allow anyone to comment, make suggestions, or submit code for potential adoption, but are managed by a small group of core programmers who determine what code to incorporate into official releases.  Additionally, individuals having nothing to do with the writing of the code can use it, subject to constraints on commercialization incorporated into the copyright license, which vary from project to project.  Constructing Commons discusses in some detail how to adapt the Ostrom framework to account for these and other differences between natural resource commons and constructed cultural commons.  We expect the framework to evolve further as researchers apply it to specific case studies.

The Constructing Commons framework suggests a means to investigate the social role and significance of constructed commons institutions.  This investigation is relevant to property law in particular and social ordering more generally.  The conventional view of property scholars, particularly those with interests in intellectual property law, is that resource production and consumption are, and ought to be, governed primarily by entitlements to individual resource units, held individually and allocated via market mechanisms.  To the extent that those market mechanisms are inadequate to optimize the welfare of society, in the event of market failure, government intervention is the suggested remedy.  Intellectual property rights themselves are generally justified as remedies for market failure.  Creative works and new inventions are characterized as public goods, whose intangibility prevents their originators from excluding potential users and thus recouping their investments via pricing.  Copyright and patent laws create artificial but legally sanctioned forms of exclusion, restoring a measure of market control to creators and innovators.  The conventional view regards communal and collectivist institutions, particularly those that blend informal normative structures with formal government rules, as exceptional and dependent upon pre-existing property entitlements.

Systematically performing and analyzing case studies of constructed cultural commons across a wide range of domains according to the proposed framework offers a critical method for assessing the validity of this property-focused narrative.  We suspect that, over time, the constructed cultural commons framework that we describe will yield a far larger and richer set of commons cases in the cultural context than one might discover by focusing only on patent law or scientific research or software development.  We anticipate that social ordering both depends on and generates a wide variety of formal and informal institutional arrangements, and that the logical and normative priority assigned to proprietary rights and government intervention may turn out to be misplaced.  Importantly, understanding commons in the cultural environment is likely to shed light on the ways in which managed sharing or openness with respect to cultural resources generates the “spillovers,” or third-party benefits, that are critical to the welfare effects of those resources.⁴  The social value of information lies not only in its effect on the producer and the consumer of that information, but also in the ways in which the consumer shares that information with others.

Beyond our proposal of a framework for studying them, our consideration of constructed cultural commons also highlights a number of points that are important in the study of intellectual property going forward.  Considering constructed commons helps to elevate collective, intermediate solutions to their possible place of significance in accounts of property regimes and should diminish the skepticism of many scholars that collective solutions can work beyond narrowly defined situations.  Case studies will also call our attention to the constructed, designed character of both the cultural and the legal environment in regard to knowledge and information policy problems.  Finally, as they have they have done in the study of natural resource management, systematic analyses of constructed commons across a wide range of collected case studies should lead us to doubt panacea prescriptions drawn from overly simplistic models.

Acknowledgments:

Copyright © 2010 Cornell Law Review.

Michael J. Madison is Professor of Law and Associate Dean for Research, University of Pittsburgh School of Law.  Brett Frischmann is Associate Professor of Law, Loyola University Chicago School of Law.  Katherine Strandburg is Professor of Law, New York University School of Law.  Parts of this work were completed while Professor Strandburg was visiting at New York University School of Law (2007-08) and Fordham University Law School (Fall 2008).

This Legal Workshop Editorial is based on: Michael J. Madison, Brett Frischmann & Katherine J. Strandburg, Constructing Commons in the Cultural Environment, 95 CORNELL L. REV. ___ (2010).

Because separate opinions and reversals constitute behavioral manifestations of judges’ discretionary authority, studies of dissensus shed light on critical questions related to the effective functioning and legitimacy of our legal system and the operation of the rule of law. . . . Our findings cut both ways. The evidence we have presented in the preceding pages of this book demonstrates that judging is both a legal and a political activity . . . .²

Surveying the results of recent quantitative studies of judging, Cass Sunstein and Thomas Miles observe that “[f]or those who believe in the rule of law, and in the discipline imposed by the legal system, the results of the New Legal Realism need not be entirely discouraging. The glass is half empty, perhaps, but it is also half full.”³

The rule of law is often said to be a defining aspect of the American system of governance—the foundation stone of our free society—in which judges play a pivotal role.⁴> It is alarming to be informed that serious problems in judging threaten the rule of law or that the rule of law glass is half empty. If these concerns are valid, remedial measures must be sought and implemented without delay.

But are they correct? Have studies of judging shown that the rule of law is in trouble? To evaluate these assertions, one must first know what the rule of law requires of judges; then one must identify or measure how much and in what ways judges are falling short of these requirements. To say that the rule of law glass is half full, continuing with Sunstein’s and Miles’s metaphor, requires knowing what a full glass of the rule of law looks like: there must be rule of law baselines or standards.

A quick look at these studies exposes the need for such baselines. The authors of Are Judges Political? find that “[f]requently the law is clear, and judges should and will simply implement it, no matter who has appointed them.”⁵ Their study provides “considerable evidence to suggest that they do exactly that”;⁶ in five major areas studied they find no ideological effect on judicial decisions, and even when an effect did show, the differences, they admit, were “not huge.”⁷ A study was not necessary to show that judges do not vary greatly by ideology in their legal decisions because typically about 90 percent of federal appellate decisions (more when unpublished cases are counted) are issued without a dissent. Judges, then, agree an overwhelming proportion of the time regardless of ideological differences. By that measure, at least, the rule of law appears to be working well.

The authors of Judging on a Collegial Court find that ideological differences show a statistically significant increase in the probability of a dissent or a concurrence. But it turns out that the size of the effect—its actual impact on the run of decisions—was minuscule: “The difference in absolute terms is rather small, with slightly less than a 0.01 increase in the probability of a concurrence and a 0.02 increase in the probability of a dissent.”⁸ That is hardly worrisome. Confounding the authors’ expectations, furthermore, their study finds no statistically significant correlation between ideological difference and rates of reversal—that is, appellate panels did not reverse trial judges with an opposing ideological disposition at a higher rate. This study, covering decisions by nearly a thousand judges over four decades, would appear to confirm that political views have little impact on judicial decisions, yet, without explaining why, the authors suggest that their findings “cut both ways” on the rule of law.

Behind the disquieting assertions about the rule of law lies an unstated assumption: the proposition that any finding of political influence on judging, no matter how small, is contrary to the rule of law. This, however, is a profoundly unrealistic assumption—ironically so, because these political scientists and law professors claim the mantle of legal realism.

 
I.
Balanced Realism About Judging

For more than a century, judges and jurists in the United States have expressed a view of judging that I call “balanced realism.”⁹ Balanced realism recognizes that there are gaps and uncertainties in the law, that sometimes judges have discretion and must make choices, that different judges can sometimes interpret the same law in different ways owing to differences in perspective and background, that inconsistent precedents or conflicts in the applicable law can exist, and that sometimes judges manipulate the law to reach desired ends. (I call these factors the “skeptical aspects.”) But balanced realism also recognizes that a substantial majority of the time, the rules and their application are clear and predictable, that judges are indoctrinated into a shared legal tradition and legal practices that lead then to interpret and apply legal rules in similar ways, that judging takes place in a thick institutional setting that constrains judges, that most judges strive to abide by the commitment to follow the law, and that the overwhelming majority of judicial decisions are legally determined (the “rule-bound” aspects). Balanced realism acknowledges the limitations inherent in the law and in human judges—limitations that cannot be eliminated—yet it also recognizes that law nonetheless works, that judges can and do render rule-bound decisions.

Judge Benjamin Cardozo famously articulated a balanced realism about judging in The Nature of the Judicial Process:

No doubt there is a field within which judicial judgment moves untrammeled by fixed principles. Obscurity of statute or of precedent or of customs or of morals, or collision between some or all of them, may leave the law unsettled, and cast a duty upon the courts to declare it retrospectively in the exercise of a power frankly legislative in function.¹⁰

Cardozo insisted that when making these decisions a judge must decide in terms of the community view, not the judge’s personal view, but he was aware that it is difficult to keep the two apart: “The perception of the objective right takes the color of the subjective mind.”¹¹ But despite the inherent openness of law and the limitations of human judges, Cardozo reminded his audience, “[w]e must not let these occasional and relatively rare instances blind our eyes to the innumerable instances where there is neither obscurity nor collision nor opportunity for diverse judgment.”¹²

Multiple judges before and after Cardozo have described judging in similar terms. In 1886, for example, Judge Thomas Cooley emphasized that uncertainty in the application of law cannot be eliminated

because in the infinite variety of human transactions it becomes uncertain which of the opposing rules the respective parties contend for should be applied in a case having no exact parallel, and because it cannot possibly be known in advance what view a court or jury will take of questions upon which there is room for difference of opinion.¹³

Differences in the judicial application of law, he wrote, “must always exist so long as there is variety in human minds, human standards, and human transactions.”¹⁴ In 1924, Judge Irving Lehman acknowledged that “no thoughtful judge can fail to note that in conferences of the court, differences of opinion are based at least to some extent upon differences of viewpoint.”¹⁵ Judge Bernard Shientag remarked in 1944,

[n]aturally, it is in cases where the creative faculty of the judicial process operates, where there is a choice of competing analogies, that the personality of the judge, the individual tone of his mind, the color of his experience, the character and variety of his interests and his prepossessions, all play an important role.¹⁶

Judge Albert Tate observed in 1959, “like all other human beings[, judges] have limitations, of vision, knowledge, intelligence, or predisposition which sometimes influence their judicial actions.”¹⁷ In 1963, Judge Charles Clark admitted that cases arise in which there is no clear legal answer, and the judge “is on his own for the ultimate result which must reflect his background, his personality, and his inner convictions.”¹⁸ And so on.

This encapsulates what many judges have said about judging: the bulk of the law is clear, but the law has a margin of uncertainty; judges try their best to rule in an objective fashion, but their personal views sometimes seep through to influence their decisions. The crucial point is that law cannot be made perfectly certain and judges cannot be made to reason like machines, entirely free of background influences. These inherent aspects of judging shape and constrain what is possible. “The rule of law is not the doctrine of perfect decision,” Judge Alvin Rubin counseled: “[I]n many cases a conscientious decision is as much as can be expected, and . . . there is no ultimate ‘right’ answer.”¹⁹

Now it is possible to identify the fundamental flaw in the assumption that any showing of political influence on judicial decisions is inconsistent with the rule of law. A realistic understanding of the rule of law would assume that a certain irreducible amount of ideological influence will be present even in the best system of judging.²⁰ As judges have repeatedly stated, it cannot be otherwise. A realistic view would therefore expect that quantitative studies will find statistically significant correlations in certain contexts between ideology and judicial decisions. This finding in itself, without more, says nothing at all about the rule of law, because it is an inherent aspect of judging. Or to put the point another way, a full glass of the rule of law, like a full glass of milk, is not filled to the brim. The open space between the lip of the glass and the surface of a full glass of the rule of law is where legal uncertainty interacts with the limitations of human judges—where political influences typically come into play.

For the rule of law, what matters is the size of the ideological effect and in what contexts it manifests itself: whether it is greater than, or extends beyond or outside of, what one would expect in a well functioning system of rule-bound judging. Rule of law baselines are necessary to identify what to expect of a full glass of the rule of law. Quantitative studies can raise serious concerns about the rule of law only if their results establish that judicial decisions fall measurably below these baselines. Only then would grounds exist to assert that the rule of law glass is half full, or nearly empty.

 
II.
Constructing Rule of Law Baselines

Throughout this Essay, I have referred to baselines in the plural because a number of standards will be necessary to account for variations in the nature of legal provisions and the circumstances of judging.  Two factors have particular bearing on the formulation of standards: the type of legal issue a judge is called upon to decide, and the level of the court.

In connection with the first factor, certain legal provisions—especially legal standards like “fairness,” “reasonableness,” or “the best interests of the child”—explicitly call upon judges to exercise discretion or to make judgments of a type that allows or invites (or makes it harder to screen out) the expression of personal views. Consequently, a rule of law baseline for this type of question, which remains legally governed and hence should manifest a significant degree of agreement, would anticipate greater variation among judges and higher correlations between their decisions and their ideological views in comparison to a rule of law baseline for narrow legal rules.

The second factor recognizes that the quantum of legal uncertainty is greater at higher court levels. The vast majority of cases are settled (fewer than two percent of federal cases make it through trial) because the applicable law and provable facts are clear, so both parties can weigh the expected costs and benefits of continuing. About ten to fifteen percent of federal appellate cases, by the estimate of a number of federal judges,²¹ involve hard or uncertain legal issues. In contrast, the skeptical aspects of law recognized by balanced realism—uncertainty, disagreement, choice, political pressure—show up in a significantly higher proportion of Supreme Court cases, whereas the rule-bound aspects are proportionally less present (including fewer institutional checks). This represents a virtual inversion of the usual balance of these factors within law and judging generally, although Supreme Court decisionmaking is still thickly draped in legal constraints. In recognition of these differences, rule of law baselines for trial courts and appellate courts should anticipate far greater agreement in legal decisions and significantly lower ideologically correlated variations in comparison with high courts (both state and federal).

Needless to say, the task of formulating rule of law baselines will be complicated, requiring ingenuity and much trial and error. This task can be done in a variety of ways, all contestable. Every baseline produced should be viewed with caution, as a proxy that stands for an approximation of an abstraction—a gross quantitative marker for what to expect from rule-bound judges.

Seeking out comparative measures is one way to proceed. For example, assume that over a seventy-five-year span conservative judges vote in the conservative direction in about fifty-five percent of their cases, whereas liberal judges vote conservative in about fifty percent of their cases.²² The relatively small five percent difference in voting behavior, one might surmise, reflects the irrepressible interaction of legal uncertainty with human judging. This historical norm could supply the basis for a rule of law baseline for federal appellate judging. A warning sign that the judicial system is in trouble, then, might be if judges as a group skew their votes in a one-sided ideological direction in a significantly higher proportion of cases, creating a greater than usual disparity between Republican- and Democratic-appointed judges.²³ Moreover, individual judges whose decisions fall far outside of this historical range might invite scrutiny for failing to rule in a sufficiently rule-bound fashion. One might create similar baselines for the Supreme Court, derived from historical norms or from a comparison of the voting patterns of Justices against one another. This would allow a determination of whether a particular Court or a particular Justice shows a propensity to rule in an ideological direction that exceeds the usual, historical range.

Setting aside levels of courts, one might also compare differences across legal issues to see whether some issues show greater ideologically linked divergence in judicial decisions than others. Applying different rule of law baselines for standards (expecting greater divergence) and for rules (expecting less) will make it possible to tease out whether the observed increase in divergence is a function of the type of legal provision at issue, or of something else (perhaps political salience or entrenched cognitive biases).

These are just illustrative suggestions. Many factors must be considered before rule of law baselines can be constructed—work that has not yet begun.

 
III.
Legitimate Objections to Rule of Law Baselines

Critics may object that it is misguided or wrong to construct such baselines, that the goal itself is ludicrous because the rule of law is a deeply contested ideal with uncertain meaning and implications for judging. Furthermore, critics might argue, quantitative standards that purport to provide a basis to evaluate judging will compress the complexity and nuance of judging in a distorting oversimplification that is susceptible to pernicious uses. These are compelling objections. I would not proffer this proposal but for the worry that leaving this gap unaddressed might be worse than the distortions that result from the effort to fill it.

As the first paragraph of this Essay reveals, political scientists and law professors, perhaps succumbing to the temptation to sell their results, have issued broad, alarming claims about the implications of their quantitative studies for the rule of law. These claims, I have argued, do not follow from the results of their studies in the absence of rule of law baselines, and they paint a false image of the state of judging. Rule of law baselines will impose greater discipline on scholars who wish to draw out broader implications from their results and will provide a sounder footing for their observations.

This effort will also lead to an important advance in the discipline of quantitative studies. Quantitative scholars demonstrate time and again through their studies that judging is not a purely legal activity. This point is not informative. Dozens of judges have admitted for decades that sometimes law is uncertain or runs out, that judges must sometimes make choices, and that sometimes their personal views have an impact on their legal decisions.²⁴ That is the nature of law and of human judging. The formulation of rule of law baselines would constitute a major advance within the field, because these baselines would formally incorporate the recognition of this reality, affecting the orientation and design of the next generation of studies. Future quantitative studies would produce information worthy of attention, not when merely finding indications of ideological influence, but when finding a notable deviation from expected baselines. Absent rule of law baselines, these rapidly multiplying studies will merely confirm what everyone in law already knows.

Acknowledgments:

Copyright © 2010 Duke Law Journal.

Brian Z. Tamanaha is a Professor at the Washington University School of Law.