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  Supreme Court Preemption: The Contested Middle Ground of Products Liability

  Samuel Issacharoff and Catherine M. Sharkey

  Preemption cases are generally described as a “muddle,” seemingly defying attempts at categorization. While the cases fit uncomfortably into the high-voltage area of federal-state relations, they do not lend themselves to the easy liberal or conservative framework that typifies discussions of the Eleventh Amendment and sovereign immunity. Moreover, since preemption is invariably invoked to defeat a state law claim asserted by a plaintiff, the effect of preemption would seem to be most appropriately analyzed as an effective weapon in the defense arsenal in an era increasingly hostile to recovery in the courts. We offer a different take on preemption, focusing primarily on the most difficult cases in which Congress has sought to regulate a discrete aspect of nationwide economic activity rather than seeking to regulate an entire field or, alternatively, leaving regulation in the hands of the states. Our best examples come from the universe of cases that concern products liability, where Congress has often sought to define the regulatory standards that products must meet while leaving intact the background state tort law for remedies. Rather than standing alone as strange outliers in the contested terrain between federal and state regulation, these preemption cases occupy a difficult middle ground. At one pole are the areas of law that Congress has sought to capture altogether, such as under Employee Retirement Income Security Act (ERISA) or Copyright Act. In these areas of “field preemption,” the statutes typically announce the exclusive sway of federal law and typically provide for exclusive jurisdiction in the federal courts as well. At the other pole stand the dormant Commerce Clause cases, typified by a judicial determination that Congress’s silence as to both substantive law and federal jurisdiction should nonetheless be seen as an exercise of federal power to keep states from regulating in a discriminatory fashion. The products liability cases present themselves as a particularly propitious area of inquire in which two of the great themes in preemption law come together. Because tort law is so thoroughly a traditional area of state governance, the federalization of this branch of the common law threatens a serious reallocation of power in our delicate system of dual sovereignty. At the same time, the sweep of the market for products undermines any realistic sense that the individual states are the optimal level of regulatory authority for what is increasingly an undifferentiated national, and indeed international, market. Products liability preemption cases thus form a natural environment, for a hesitant federalization of American law. When applied properly, preemption can foster predictability in the manufacture of products and permits princes to be set in anticipation of known liability risks. We contend that despite the common law origin of products liability law, the unmistakable evolution has been toward the development of national law for a national market. By examining the tort-based preemption cases that have come to the Supreme Court in the past two decades, we demonstrate how the Rehnquist Court, contrary to its billing as a proponent of state autonomy from federal regulation, was actually a critical ally in expanding the reach of federal law. Further, and contrary to the more facile political explanations of the Court’s behavior and to the claim that all is hopelessly muddled, we contend that the Court is highly attentive to two problems that ultimately drive its move toward “federalization,” the term we apply to the nationalizing impulse in this area of law. The first is the need for coordination among the states. In the absence of federal regulation, it is difficult for anything from safety standards to environmental impact to be addressed comprehensively. Absent coordination, there is the risk that states with the greatest taste for regulation or with disproportionate liability rules will come to define the product market, regardless of the overall efficiencies or fairness of the rules they set. Second, there is the risk of predation when states use their power to impose liability or even assess punitive damages on out-of-state enterprises whose long-term viability may be of insufficient concern to them. Our approach draws in part from a broader study of the way in which the jurisprudence of expanding federal substantive law and expanding federal jurisdiction over state law matters work in tandem to frontload the work of the federal judiciary as a federalizing agent for national market concerns. We have examined a range of preemption cases decided by the Rehnquist Court to discern a trend, over the long haul, in the direction of reading the claims of congressional authority broadly and correspondingly narrowing the field for permissible state conduct. While our sample is necessarily partial, the overall long-term trend is sufficiently compelling to mute overblown claims to antipathy to regulation.

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  Empirical Study of the Civil Justice System

  Daniel P. Kessler and Daniel L. Rubinfeld

  In this essay, we discuss empirical research on the economic effects of the civil justice system. We discuss research on the effects of three substantive bodies of law—contracts, torts, and property—and research on the effects of the litigation process. We begin with a review of studies of aggregate empirical trends and the important issues involving contracts and torts, both positive and normative. We survey some of the more interesting empirical issues, and we conclude with some suggestions for future work. Because studies involving property law are so divergent, there is no simple description of aggregates that adequately characterizes the subject. In its place, we offer an overview of a number of the most important issues of interest. We describe (selectively) the current state of empirical knowledge, and offer some suggestions for future work. The section on legal process builds on the previous substantive sections. With respect each of the steps, from violation to trial to appeal, we review some of the more important empirical contributions.

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  Global Environmental Governance as Administration: Implications for International Law

  Benedict Kingsbury

  This chapter argues for the analysis of global and transnational environmental governance as administration. This approach sheds light on some important but neglected themes in international environmental law scholarship. The chapter begins by outlining several basic administrative concepts that call for analysis under such an approach (section 2), then sets forth an analytical framework of five structures of administration in global governance (sections 3–6). The five structures include the following (these are archetypes—practice often combines them or blurs the divisions). Distributed administration is performed largely by organs of national governments, acting pursuant to international agreements or other transnational regimes. International administration is performed by a formal intergovernmental body with a defined organization and competence, usually established by treaty. Inter-governmental network administration is performed by networks of national government officials that operate with less formal definition. Hybrid administration is performed by a joint institution, or a less formal coordination, involving public and private actors in a transnational context. It will be considered together with private administration, conducted by actors that are not governmental or intergovernmental. It will be argued that governance of fundamental global and transnational environmental problems is being displaced from distributed administration, which has been the predominant model, towards direct administration by intergovernmental organizations or networks on the one side or towards hybrid or private administration on the other. Distributed administration is instead becoming part of the process of diffusion of national environmental law and policy approaches as well as a residuum for special inter-state situations. This change is having fundamental effects on international environmental law, but has not been sufficiently incorporated into scholarship in the field. Due to space limitations, this chapter must focus largely on positive law and analytic issues. However, these issues are bound up with fundamental normative questions, which the administrative approach opens up for consideration. Normative appraisal in administrative law is often conducted by reference to basic public law values, such as legality, proportionality, rationality, accuracy, effectiveness, efficiency, and respect for basic rights. Political theory inquiries into democracy and legitimacy in global governance may be given more applied purchase by distilling normative values and implicit trade-offs, embodied in such legal-administrative components as transparency, notification, participation, reason giving, and review. Inflections in the design and operation of different administrative systems may have impacts on distributive outcomes, procedural fairness, and other elements of justice. These considerations feed back into the normative theory of institutional design under conditions of power asymmetry, uneven information flows and filtering, and pervasive uncertainties in each governance unit about which policies to choose and what their consequences will be amid continuous mutual jostling, adjustment, and reclustering.

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  Political Liberalism and the Structure of Rights: On the Place and Limits of the Proportionality Requirement

  Mattias Kumm

  What do you have in virtue of having a right? Are rights ‘trumps’ over competing considerations of policy? Do they have priority over ‘the good’ in some strong sense? Are rights ‘firewalls’ providing strong protections against demands made by the political community? Even though there are interesting and significant differences between conceptions of rights in the liberal tradition, they generally share the idea that something protected as a matter of right may not be overridden by ordinary considerations of policy. Circumstantial all-things-considered judgements on what is in the general welfare are generally insufficient grounds to justify infringements of rights. Reasons justifying an infringement of rights have to be of a special strength. Yet this claim of a special priority of rights sits uneasily with a prominent feature of constitutional and human rights adjudication. As comparative constitutional scholars have pointed out, a general feature of rights analysis all over the world is some version of a proportionality test. Though proportionality analysis does have a role to play in US constitutional practice as well, it is a more prominent and more explicitly embraced feature of rights reasoning under constitutions or treaties established after the Second Word War. Proportionality is widely used as a test by judiciaries to determine the limit of a constitutionally guaranteed right. An act of a public authority that infringes the scope of a protected right can still be justified, if it can be shown to pursue legitimate purposes in a proportional way. Only acts by public authorities that are disproportionate will be struck down on the grounds that they violate an individual’s right. But does the proportionality test provide an adequate structure for assessing rights claims? Can it do justice to the basic liberal intuition that rights enjoy some kind of special priority over considerations of public policy, and that reasons overriding rights must be of some special, compelling strength? This chapter will proceed in two parts. The first will provide a brief description and further illustration of an account of rights that puts proportionality analysis front and centre. The purpose of this part is to provide a better understanding of the proportionality test and its connection to rights. This part will draw on Robert Alexy’s influential theory of constitutional rights. The second part will assess whether and to what extent such a conception of rights can adequately accommodate basic commitments of Political Liberalism. Within the tradition of Political Liberalism there are three basic ideas that are connected to the idea of the special priority of rights, which I will refer to as antiperfectionism, anticollectivism and anticonsequentialism, respectively. The implications of each of these ideas for an adequate structure of rights will then be assessed. As will become clear, reasoning about rights has a more complex structure than the focus on proportionality analysis suggests. The proportionality structure is rightly a central feature of rights reasoning, but it is merely one of three distinct structural elements central to reasoning about rights as a matter of political morality. Other structural features of rights discourse include the idea of excluded reasons and the prohibitions of certain means-ends relationships. Furthermore, there are institutional considerations that sometimes justify imposing additional requirements on the justification for an infringement of a right, requiring reasons of special strength. There is no one structural element that is the defining feature of rights reasoning. Rights reasoning, as it occurs in the practice of courts and tribunals worldwide, reflects the structural richness of reasoning about political morality. The language of rights in human and constitutional rights practice merely provides a way to structure the assessment of policy choices as they relate to affected individuals. What you have in virtue of having a right is as strong or as weak as the proposition of political morality that the claim is grounded in. Analysing the structure of rights reasoning helps provide a clearer understanding of the structural complexity of a liberal political morality. Additionally, it helps guard against a narrow understanding of rights that unconvincingly ties the very idea of rights to a particular moral structure.

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  "Unfair" Dispute Resolution Clauses: Much Ado About Nothing?

  Florencia Marotta-Wurgler

  This chapter takes an empirical look at boilerplate terms that stand in the midst of much current controversy—the dispute resolution clauses. Using a dataset compiled from software license contracts, it finds no indication that these terms place hardships on consumers. Vendors choose governing law and forum, not to bar consumer protections or to deter lawsuits, but most often for simple convenience, directing the dispute to be resolved in their home state. Moreover, these terms are used less often than prior commentators feared.

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  U.S. v. Microsoft: Lessons Learned and Issues Raised

  A. Douglas Melamed and Daniel L. Rubinfeld

  On May 18, 1998, the U.S. Department of Justice, 20 individual states, and the District of Columbia filed suit against the Microsoft Corporation claiming that Microsoft had monopolized the market for personal computer (“PC”) operating systems (“OS”s) and had used its monopoly to engage in a wider range of antitrust violations. The case was tried in Federal District Court from October 19, 1998, through June 24, 1999. The court reached its findings regarding the facts of the case on November 5, 1999, and its legal conclusions on April 3, 2000. Microsoft’s appeal to the Circuit Court of Appeals for the District of Columbia was decided on June 28, 2001. The appellate court affirmed the monopolization claim, reversed other conclusions by the District Court, and remanded the case to the District Court to find an appropriate remedy. Following extensive settlement discussion among the various parties, the Department of Justice (DOJ) and Microsoft reached a settlement agreement. Nine states opted not to join the settlement and proposed a different remedy. A 32-day remedy trial was held, and on November 1, 2002, the District Court issued a remedy ruling, which was ultimately upheld by the Court of Appeals. Microsoft’s antitrust problems did not end with the Government’s case. Microsoft was sued privately by multiple parties and in most cases settled for substantial sums. After its own investigation, the European Commission (EC) concluded that Microsoft’s bundling of its operating system with its “player” (which allows a user to stream audio or video content from the web) violated Article 82 of the European Commission Treaty. The EC ordered Microsoft to pay a substantial fine and to put onto the market a second version of its current operating system, Windows XP, without a player. Microsoft has appealed the EC’s ruling to the Court of First Instance, and (absent a settlement) could take that appeal further to the European Court of Justice. These is no doubt that, from the public’s perspective U.S. v. Microsoft was the antitrust case of the 1990s and perhaps for decades before that. The investigation, the trial, and its aftermath received wide press coverage throughout. A number of the major actors in the drama became household names, as much as a result of the public relations battle among the parties as of the litigation itself. There remains however, substantial debate as to the ultimate legal import of the case. In this essay, we will explain why we believe the case was indeed a significant antitrust case that has important implications for antitrust enforcement in the 21st Century. U.S. v. Microsoft not only proved that the Government could litigate a complex case in a dynamic, high technology industry in a timely fashion, but also reinvigorated Section 2 of the Sherman Act. The case provided a foundation for antitrust enforcement in the “new economy.”

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  Comment: Credit Risk Transfer, Hedge Funds, and the Supply of Liquidity? (H. Zimmerman)

  Geoffrey P. Miller

  Professor’s Zimmerman’s paper is a rich source of insights about the important and burgeoning market in credit risk transfer (CRT) instruments, and in particular the spectacular growth of credit derivative and the rise of hedge funds as sellers of these instruments. Professor Zimmerman astutely observes that CRT instruments can enhance social wealth by distributing credit risk to more efficient risk bearers. Modeling CRT as a sale of an out-of-the-money put option, he observes that CRT improves the liquidity of the financial system. While recognizing these benefits, Professor Zimmerman is concerned about the potential risks. The CRT market, at present, is anything but transparent. This opacity in the market creates a risk that the CRT market, which has operated will in ordinary times, may not be well-adapted to cope with crisis. More specifically, Professor Zimmerman is concerned that due to their highly leveraged capital positions the sellers of these puts may themselves lack the liquidity to satisfy their commitments under unusual market conditions. The actual providers of liquidity then may be the hedge fund’s creditors. In a financial crisis that triggers many claims on CRT instruments, those creditors (mostly investment banks) may themselves lack the liquidity to satisfy their obligations—especially because, in addition to lending to hedge funds, these institutions are increasingly competing with hedge funds by offering their own CRT products. If the investment banks lack liquidity in such circumstances, central banks will be called on to supply liquidity in order to prevent a fundamental breakdown in the financial system. But central banks themselves may not operate as effective liquidity providers of last resort, given the lack of transparency in the system and the cross border feature of many CRT contracts. Moreover, because in a crisis these events will happen quickly, there is a risk that the coordination function of the market will break down as contracts are not settled in an orderly fashion. Any breakdown in the orderly process of settlement may greatly exacerbate the problems as market participants lose confidence in the effective functioning of the system.

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  Selected Ethical Considerations in Class Action Practice

  Geoffrey P. Miller

  Covers: I. Communications with Absent Class Members; II. Reverse Auctions: Reynolds v. Beneficial National Bank; III. Ethical Considerations Regarding Attorneys' Fees; IV. Ethical Considerations Regarding Conflicts of Interest.

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  Bernard Williams

  Thomas Nagel

  Bernard Williams, in full Sir Bernard Arthur Owen Williams, (born September 21, 1929, Westcliff, Essex, England—died June 10, 2003, Rome, Italy) was an English philosopher, noted especially for his writings on ethics and the history of Western philosophy, both ancient and modern. Williams was educated at Chigwell School, Essex, and Balliol College, Oxford. During the 1950s he served in the Royal Air Force (1951–53) and was a fellow of All Souls College and New College, Oxford. He was appointed Knightbridge Professor of Philosophy at the University of Cambridge in 1967 and Provost of King’s College, Cambridge, in 1979. He was Monroe Deutsch Professor of Philosophy at the University of California, Berkeley, from 1988 to 2003 and White’s Professor of Moral Philosophy at Oxford from 1990 to 1996. In 1955 Williams married Shirley Catlin, who, as Shirley Williams, became a prominent political figure in Britain; in 1993 she was created Baroness Williams of Crosby. In 1974 the marriage was dissolved, and Williams married Patricia Skinner. Williams headed or served on a number of public commissions, notably the Committee on Obscenity and Film Censorship (1977–79), and was a director of the English National Opera. He was knighted in 1999.

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  Migrant Women

  Nicola Piper and Margaret L. Satterthwaite

  This book encapsulates the law of international migration by examining developments first addressed in the volume on Migration and International Legal Norms (edited by T.A. Aleinikoff and V. Chetail; T.M.C. Asser Press 2003) and by discussing wholly new themes. In this regard, the book considers emerging issues, such as the challenges posed by migration to State sovereignty and the protection of human rights as a result of the increasing tensions between anti-terrorism or security legislation and immigration measures, the impact of the use of biometrics technology (e.g. fingerprinting) to identify and better monitor international movements of persons, and enhanced cooperation on the European Union external border. The human rights of vulnerable groups of migrants, such as migrant workers, women, victims of trafficking, and stateless persons are also examined. The issue of forced migration warrants a consideration of the international migration law relating to groups such as internally displaced persons, as well as the international community’s response to secondary movements of asylum-seekers. Questions of state responsibility concerning, for example, stranded migrants and provision of consular protection and assistance to migrants are also discussed. Moreover, the expansion of regional legal frameworks concerned with migration, such as EU immigration and asylum law and policy and the growing case law on European citizenship, as well as developments in free movement regimes in Africa, the Americas and the Caribbean, are added to the analysis of the growing body of international migration law. A range of persons from international organizations, legal practice and academia with expertise in International Migration Law have contributed to this volume, which is aimed at a broad audience, including policy makers, academics, researchers, postgraduate students, legal practitioners, civil society representatives and journalists.

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  The Welfare Implications of Costly Litigation for the Level of Liability

  A. Mitchell Polinsky and Daniel L. Rubinfeld

  The central concern of the economic theory of liability is how to induce an injurer to take the socially appropriate level of care-the level that minimizes the sum of the cost of taking care and the losses to victims. An important result in this theory is that, assuming litigation is costless, the rule of strict liability with compensatory damages leads the injurer to choose the appropriate level of care. This follows because, under strict liability with compensatory damages, the injurer's problem—minimizing his cost of care plus his cost of liability—is identical to society's problem. The analysis of strict liability with compensatory damages is affected in two ways when litigation costs are taken into account. First, it is no longer true (as was implicitly assumed in the preceding argument) that whenever a victim suffers harm he will sue the injurer; only victims whose losses exceed their cost of litigation will sue. This difference could lead the injurer to take less care (because he will not have to pay for all of the losses he causes) or more care (because, by reducing the harm suffered by victims, he can reduce the number who sue). Second, the social problem now becomes one of minimizing the sum of the cost of care, the losses of victims, and the cost of litigation. With these changes, it may no longer be desirable to set the level of liability equal to the victim's loss. This article analyzes the socially optimal adjustment to compensatory damages when litigation is costly. It will be shown that strict liability with compensatory damages generally results in the injurer choosing an inappropriate level of care and in the parties incurring excessive litigation costs. Thus, it is not socially optimal to use compensatory damages. Whether compensatory damages should be adjusted upward or downward will be seen to depend on the effect of changes in the level of liability on the injurer's incentive to take care and on the victims' incentives to sue. The possibility that the optimal adjustment to compensatory damages is positive can be illustrated by a simple example involving one injurer and one victim. Suppose there are only two levels of care that can be chosen by the injurer—“low care” and “high care.” If the injurer takes low care, the victim's loss is $700, while if the injurer takes high care, the victim's loss is $500. The extra cost to the injurer of taking high care is $100. Thus, ideally, the injurer would take high care. Also, let the victim's cost of litigation be $1,000 and, for simplicity, the injurer's cost of litigation be zero. First consider whether the ideal outcome-high care and zero litigation costs-can be achieved under strict liability with compensatory damages. Regardless of the injurer's care, the victim will not sue because his loss is less than his cost of litigation. Consequently, the injurer will take low care, and the ideal outcome will not be attained. Now consider strict liability with liability equal to compensatory damages plus $301. If the injurer takes low care, the victim will sue because his loss plus the adjustment exceeds his cost of litigation ($700 + $301 > $1,000). But if the injurer takes high care, the victim will not sue (since $500 + $301 < $1,000). The injurer will choose to take high care because the extra cost of taking high care ($100) is less than his liability if he takes low care ($700 + $301). Since there will then not be any litigation, the ideal outcome will be achieved. The possibility that the optimal adjustment to compensatory damages is negative can be shown by modifying the example slightly. Now assume that the injurer's extra cost of taking high care is $600 and that the victim's cost of litigation is $300. Then the ideal outcome is for the injurer to take low care and, as before, for there to be no litigation costs. Under strict liability with compensatory damages, the victim will sue regardless of the injurer's care; this will lead the injurer to take low care. However, if compensatory damages are adjusted downward by $401, the victim will not sue when the injurer takes low care (since $700 - $401 < $300). Thus, the ideal outcome can be attained by an appropriate downward adjustment. These examples illustrate two general principles. With respect to the injurer's choice of care, adjusting damages upward when the injurer's care would otherwise be too low with compensatory damages, or downward when care would be too high, will increase social welfare. And with respect to the cost of litigation, adjusting compensatory damages downward to reduce the victims' incentives to sue will increase social welfare. The optimal adjustment to compensatory damages takes both of these considerations into account and may be positive or negative. The main points of the article are developed in Section II using a model in which there is a single injurer and a group of identical victims, and in Section III using a model with two groups of victims. (The Appendix shows that the results of Sections II and III hold more generally.) In Section IV the same framework is used to study the rule of negligence. Section V contains some concluding remarks.

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  The Welfare Implications of Costly Litigation for the Level of Liability

  A. Mitchell Polinsky and Daniel L. Rubinfeld

  The central concern of the economic theory of liability is how to induce an injurer to take the socially appropriate level of care-the level that minimizes the sum of the cost of taking care and the losses to victims. An important result in this theory is that, assuming litigation is costless, the rule of strict liability with compensatory damages leads the injurer to choose the appropriate level of care. This follows because, under strict liability with compensatory damages, the injurer's problem—minimizing his cost of care plus his cost of liability—is identical to society's problem. The analysis of strict liability with compensatory damages is affected in two ways when litigation costs are taken into account. First, it is no longer true (as was implicitly assumed in the preceding argument) that whenever a victim suffers harm he will sue the injurer; only victims whose losses exceed their cost of litigation will sue. This difference could lead the injurer to take less care (because he will not have to pay for all of the losses he causes) or more care (because, by reducing the harm suffered by victims, he can reduce the number who sue). Second, the social problem now becomes one of minimizing the sum of the cost of care, the losses of victims, and the cost of litigation. With these changes, it may no longer be desirable to set the level of liability equal to the victim's loss. This article analyzes the socially optimal adjustment to compensatory damages when litigation is costly. It will be shown that strict liability with compensatory damages generally results in the injurer choosing an inappropriate level of care and in the parties incurring excessive litigation costs. Thus, it is not socially optimal to use compensatory damages. Whether compensatory damages should be adjusted upward or downward will be seen to depend on the effect of changes in the level of liability on the injurer's incentive to take care and on the victims' incentives to sue. The possibility that the optimal adjustment to compensatory damages is positive can be illustrated by a simple example involving one injurer and one victim. Suppose there are only two levels of care that can be chosen by the injurer—“low care” and “high care.” If the injurer takes low care, the victim's loss is $700, while if the injurer takes high care, the victim's loss is $500. The extra cost to the injurer of taking high care is $100. Thus, ideally, the injurer would take high care. Also, let the victim's cost of litigation be $1,000 and, for simplicity, the injurer's cost of litigation be zero. First consider whether the ideal outcome-high care and zero litigation costs-can be achieved under strict liability with compensatory damages. Regardless of the injurer's care, the victim will not sue because his loss is less than his cost of litigation. Consequently, the injurer will take low care, and the ideal outcome will not be attained. Now consider strict liability with liability equal to compensatory damages plus $301. If the injurer takes low care, the victim will sue because his loss plus the adjustment exceeds his cost of litigation ($700 + $301 > $1,000). But if the injurer takes high care, the victim will not sue (since $500 + $301 < $1,000). The injurer will choose to take high care because the extra cost of taking high care ($100) is less than his liability if he takes low care ($700 + $301). Since there will then not be any litigation, the ideal outcome will be achieved. The possibility that the optimal adjustment to compensatory damages is negative can be shown by modifying the example slightly. Now assume that the injurer's extra cost of taking high care is $600 and that the victim's cost of litigation is $300. Then the ideal outcome is for the injurer to take low care and, as before, for there to be no litigation costs. Under strict liability with compensatory damages, the victim will sue regardless of the injurer's care; this will lead the injurer to take low care. However, if compensatory damages are adjusted downward by $401, the victim will not sue when the injurer takes low care (since $700 - $401 < $300). Thus, the ideal outcome can be attained by an appropriate downward adjustment. These examples illustrate two general principles. With respect to the injurer's choice of care, adjusting damages upward when the injurer's care would otherwise be too low with compensatory damages, or downward when care would be too high, will increase social welfare. And with respect to the cost of litigation, adjusting compensatory damages downward to reduce the victims' incentives to sue will increase social welfare. The optimal adjustment to compensatory damages takes both of these considerations into account and may be positive or negative. The main points of the article are developed in Section II using a model in which there is a single injurer and a group of identical victims, and in Section III using a model with two groups of victims. (The Appendix shows that the results of Sections II and III hold more generally.) In Section IV the same framework is used to study the rule of negligence. Section V contains some concluding remarks.

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  Environmental Law

  Richard L. Revesz and Robert N. Stavins

  This chapter provides an economic perspective of environmental law and policy. We examine the ends of environmental policy, that is, the setting of goals and targets, beginning with normative issues, notably the Kaldor–Hicks criterion and the related method of assessment known as benefit–cost analysis. We examine this analytical method in detail, including its theoretical foundations and empirical methods of estimation of compliance costs and environmental benefits. We review critiques of benefit–cost analysis, and examine alternative approaches to analyzing the goals of environmental policies. We examine the means of environmental policy, that is, the choice of specific policy instruments, beginning with an examination of potential criteria for assessing alternative instruments, with particular focus on cost-effectiveness. The theoretical foundations and experiential highlights of individual instruments are reviewed, including conventional, command-and-control mechanisms, market-based instruments, and liability rules. Three cross-cutting issues receive attention: uncertainty; technological change; and distributional considerations. We identify normative lessons in regard to design, implementation, and the identification of new applications, and we examine positive issues: the historical dominance of command-and-control; the prevalence in new proposals of tradeable permits allocated without charge; and the relatively recent increase in attention given to market-based instruments. We also examine the question of how environmental responsibility is and should be allocated among the various levels of government. We provide a positive review of the responsibilities of Federal, state, and local levels of government in the environmental realm, plus a normative assessment of this allocation of regulatory responsibility. We focus on three arguments that have been made for Federal environmental regulation: competition among political jurisdictions and the race to the bottom; transboundary environmental problems; and public choice and systematic bias.

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  Notes from the Aftermath

  AnnJanette Rosga and Margaret L. Satterthwaite

  The women of The Feminist Memoir Project give voice to the spirit, the drive, and the claims of the Women's Liberation Movement they helped shape, beginning in the late 1960s. These thirty-two writers were among the thousands to jump-start feminism in the late twentieth century. Here, in pieces that are passionate, personal, critical, and witty, they describe what it felt like to make history, to live through and contribute to the massive social movement that transformed the nation. What made these particular women rebel? And what experiences, ideas, feelings, and beliefs shaped their activism? How did they maintain the will and energy to keep such a struggle going for so long, and continuing still? Memoirs and responses by Kate Millett, Vivian Gornick, Michele Wallace, Alix Kates Shulman, Joan Nestle, Jo Freeman, Yvonne Rainer, Barbara Smith, Ellen Willis, Eve Ensler, Shirley Geok-lin Lim, Roxanne Dunbar, Naomi Weisstein, Alice Wolfson and many more embody the excitement that fueled the movement and the conflicts that threatened it from within. Their stories trace the ways the world has changed.

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  Empirical Methods in Antitrust: New Developments in Merger Simulation

  Daniel L. Rubinfeld

  Over the past ten years, European competition policy has undergone dramatic change, largely inspired by the European Commission´s move towards a more economics-based approach. A more economic approach to the application of competition law means that the assessment of each specific case will not be undertaken on the basis of the form or intrinsic nature of a particular practice but rather will be based on a careful examination and weighing of its anti- and pro-competitive effects. This move to an effects-based approach will lead itself to a rule of reason approach in antitrust proceedings, and efficiency as a goal of antitrust can be expected to play a more important role in the future. While economic reasoning is becoming increasingly common in the study of substantive antitrust, little attention has been devoted to procedural and enforcement issues. In this volume, economists and lawyers both from academia and practice investigate a number of basic questions concerning the law and economics of antitrust enforcement.

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  Preface to ‘Torture by Proxy: International and Domestic Law Applicable to ‘Extraordinary Renditions’”

  Margaret L. Satterthwaite

  The issue of the “imperial presidency,” raised in connection with the Bush administration’s response to the legal issues flowing from the 9/11 attacks, is one that now resonates broadly across the American political landscape: not just with Democrats, but with Republicans too; and not just with lawyers, but with the American public generally. Are the legal powers of the President unlimited in cases of terrorist attacks on the United States? Do the courts and legislatures have a role to play? How relevant is the U.S. Constitution in these instances? The reports, gathered here, compiled by the NYC Bar Association, merit wider distribution. Thus Silkenat and Shulman have brought them together to give readers a clearer sense of what the rule of law really means to Americans. As noted in a New York Times editorial in January 2006: “Nothing in the national consensus to combat terrorism after 9/11 envisioned the unilateral rewriting of more than 200 years of tradition and law by the president embarked on an ideological crusade.” Over the past few years, much lip service has been paid to the phrase “rule of law.” At the same time, the U.S. government has avoided basic rule of law principles by holding prisoners outside the law (off the books and out of Red Cross supervision, off shore or even on U.S. soil but without due process or urgent matter that bears on the security of this country). In these volumes, learned practitioners and scholars argue in favor of adherence to time-tested principles. Each report has a preface that places the material in historical and legal context.

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  Using Human Rights Law To Empower Migrant Domestic Workers in the Inter-American System

  Margaret L. Satterthwaite

  This chapter begins by setting out some of the forces that contribute to the exploitation of migrant domestic workers in the United States, and moves on to consider the potential role of regional human rights standard and institutions in improving the livers of migrant domestic workers in the United States. Because the chapter examines the Inter-American human rights treaties and conventions that could be brought to bear on the actions of the U.S., it does not discuss the International Convention on Protections of the Rights of All Migrant Workers and their Families and the other U.N. treaties, except insofar as they could be examined by the Inter-American human rights bodies. The Inter-American human rights norms, most prominently embodied in the American Convention on Human Rights and the American Declaration on the Rights and Duties of Man, address many of the forces of vulnerability relevant to migrant domestic workers, seeking to protect such women from the abuses they widely suffer. After uncovering a significant gap between the protective standards applicable to migrant domestic workers and the reality on the ground, the chapter will consider the possibilities for bridging that gap through human rights advocacy and litigation. Against a backdrop of hegemonic American power and official disdain for the work of regional human rights bodies, advocates have achieved some small successes by using legal norms and bodies indirectly—through media coverage, work actions, and the integration of human rights language and rules into private contracts and local legislation. Litigation efforts have been successful in some cases, allowing women to access wages and contract damages; in such instances, there may be a role for increased use of human rights law, perhaps through the filing of amicus briefs. These are several troublesome obstacles for those seeking vindication through U.S. courts, however. These include the sense of vulnerability to retaliation or deportation that many domestic workers feel when pressing their individual claims through private legal actions. Immunity is also a significant problem in the United States, where diplomats and employees of international institutions may hire migrant domestic workers though a special visa program, but also enjoy immunities within the legal system that can block enforcement of judgments. These obstacles also create impediments for litigation within the Inter-American system, where petitioners must demonstrate that they have “exhausted” available domestic remedies before seeking international remedies. While litigation is not always possible, a number of options remain to vindicate the rights of migrant domestic workers thought the Inter-American system. In the final section of the chapter, potential avenues for human rights-related action are considered. Although the chapter does not examine the norms and institutions in other regional systems, it may be helpful to advocates considering engagement with the Council of Europe system (encompassing the European Court of Human Rights and the European Convention for the Protection of Human Rights and Fundamental Freedoms) or the African Union system of human rights protection (encompassing the African Court on Human and Peoples’ Rights and the African Charter on Human and Peoples’ Rights). These systems are significantly different from the Inter-American human rights system—and from each other—so the discussion here will not be easily mapped onto those regions. It may, however, raise useful points for discussion and research.

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  The Patriot Act and the Surveillance Society

  Stephen J. Schulhofer

  On March 9, 2006, after much delay and heated accusations between Republicans and Democrats, Congress reauthorized the USA Patriot Act-the famous (or infamous) grab bag of law enforcement and intelligence-gathering powers originally approved by Congress immediately after the attacks of September 11, 2001. Despite the passage of five years and countless working hours of experience implementing its provisions, the bitter reauthorization debate unfolded in virtually complete darkness. The administration insisted that the new powers be preserved intact-indeed, that anything less would invite disaster. Yet the administration provided almost none of the concrete details necessary to assess the provisions or to understand their impact. In the end, the act's most controversial powers were approved with little or no change, and nearly all were made permanent. The elections of November 2006, which shifted control of both the Senate and House of Representatives from the Republican Party to the Democrats, clearly signaled public dissatisfaction with the Iraq War but also a more general skepticism about unchecked executive authority and a hunger for responsible oversight. It remains to be seen whether Congress will accept that mandate or allow itself to be pushed back into the quiescent role it played during the past five years. Despite the meager results of the recent reauthorization debate, there is still time to correct some of the Patriot Act's worst flaws if Congress is willing to insist on obtaining essential information, make it public where possible, and enact new legislation that reins in unnecessary powers and establishes effective safeguards against abuse. As enacted on October 26, 2001, the original USA Patriot Act represented for many Americans the epitome of mindless overreaction, a tragically misguided grant of law enforcement power that will end by destroying our liberties in order to save them. Those reactions, though not baseless, are easy for the act's defenders to refute. As they accurately point out, the act is filled with innocuous technical correctives, well-justified responses to new communications technologies, and even a few provisions creating useful new safeguards for civil liberties. Of the act's 161 distinct provisions, most are in no way controversial or problematic. Among the provisions that really do enhance law enforcement power, many are narrow and carefully tailored, enough so that few experts see in them any legitimate basis for concern. That said, the Patriot Act also includes provisions that seem technical but, once understood, have alarming implications. Many of its new surveillance powers are far broader than necessary. Some bear no relation to the terrorist threat at all. And even where a grant of new intelligence-gathering authority can be justified, the Patriot Act fails to ensure that executive branch officials remain accountable for the ways their broad new powers are used. The absence of effective oversight is no minor detail. This deficiency is dangerous. It not only heightens the risk of overreaching and abuse, but it also undermines the counterterrorism effort itself As members of the 9/11 Commission unanimously warned: “The American public has vested enormous authority in the U.S. government. . . . This shift of power and authority to the government calls for an enhanced system of checks and balances to protect the precious liberties that are vital to our way of life.” Yet the Patriot Act, as originally written, paid scant attention to this concern, and subsequent amendments have compounded the problem, expanding several of the act's most problematic provisions while doing little to require effective oversight. Ultimately, therefore, the Patriot Act does deserve much of its dark reputation. Yet legitimate criticism and public uneasiness about the act have been swamped by skillfully manipulated fears of a new terrorist attack. And in some areas where the Patriot Act retains significant safeguards, the Bush administration has simply by-passed existing laws to engage in secret surveillance on its own terms, with no accountability whatsoever. These actions have generated criticism, to be sure, but much of the public has been favorable or indifferent to them, indicating again the absence of widespread appreciation that these unnecessary shortcuts are dangerous to both our civil liberties and our security. Before focusing on the dangers, however, it is worthwhile first to acknowledge the places where the Patriot Act made constructive, well-justified changes in American surveillance law.

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  Accounting for Non-Listed Companies under United States Laws, Regulations, Accounting and Auditing Standards

  Stanley Siegel

  Since the mandatory introduction of the International Financial Standards (IFRS) for capital market-oriented companies, accounting has been in a profound change. For the first time, the IASB (International Accounting Standard Board) is now also developing an international accounting standard for independent companies. From the point of view of these companies, the objectives of providing useful information, creditor protection, transparency and tax assessment must be compensated in the accounting. In order to be able to assess whether the present standard draft meets these requirements, various questions must be answered. What links and counter-comments exist between the different purposes of accounting? How do international accounting standards fit into national corporate and tax law? What costs are incurred by international accounting? What are the advantages of international standards and what problems do they present? These and many other questions are dealt with in detail in the individual contributions and solutions are introduced.

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  Instrument Choice

  Richard B. Stewart

  This chapter examines the several different types of environmental regulatory instruments, including command and control requirements, economic incentive systems, and information-based instruments, and their role in international environmental regulation. Research on, and both positive and normative analysis of, environmental regulatory instruments in domestic settings is relatively advanced in the United States and has more recently emerged in Europe and some other regions. In the context of international environmental regulation, there have been a number of studies of regulatory instruments in specific fields, but systematic study of the distinctive issues posed by instrument choice in the international context is still in an early stage. Environmental regulatory instruments provide incentives for actors who cause or contribute to pollution, environmental degradation, and ecosystem stress to change their behaviour in more environmentally protective ways. These actors are producers, resource users, developers, and consumers, including government entities engaged in such activities. These instruments are designed to implement public norms of environmental protection, and redress the limitations of private law, market ordering, and criminal law in securing appropriate behavioural changes on the part of these actors. Regulatory instruments may also serve to promote changes in actors’ perceptions and values, and serve expressive or symbolic functions in affirming environmental and other societal norms. The positive study of regulatory instruments seeks to identify and explain patterns in the development, and use of different instruments to address different types of environmental problems in different institutional settings. Such patterns may be explained, for example, by the instruments’ functional performance, the interests of relevant governmental and non-governmental actors, or sociological influences. From a normative perspective, regulatory instruments can be evaluated in terms of their efficacy in securing environmental protection objectives; their efficiency in achieving protection at the lowest social cost; and their ability to satisfy distributional, equity, and governance values. The subjects of regulation can be broadly divided into three groups: the regulation of products (including their characteristics, use, and disposal); product and process methods (PPMs), including manufacturing, agriculture, and resource extraction; and other forms of natural resource use, development, or consumption. Regulatory programmes may be based on the protection of specific resources, such as wetlands, the atmosphere, or endangered species, against a variety of stresses. Or, they may be stressor-oriented, aimed at controlling specific types of pollution, development, or consumption activities that may affect a variety of resources. There are three basic types of regulatory instruments: command and control measures, economic incentive systems, and information-based approaches. In some regulatory programmes, these instruments may be designed as a means for achieving given environmental quality objectives, for example, the prevention of ‘dangerous concentrations’ of atmospheric greenhouse gases, the maintenance of sustainable wildlife populations, or the achievement of defined limits on aggregate pollution or environmental stresses (such as a phase-down of ozone-depleting substances or preventing a net loss of wetlands). In other cases, including, for example, requirements for the use of best available technologies (BAT) and best environmental practices (BEP), there may be no direct linkage to a specific environmental result. Instruments also differ in the degree of flexibility they allow regulated actors, including whether they specify a given environmental result (for example, a fixed percentage reduction in emissions) while leaving the actor free to choose the means for achieving it or whether they specify the means to be used (for example, the use of designated control technologies). All of these different regulatory instruments must, in order to be effective, be backed up by requirements and arrangements for monitoring compliance and environmental performance; for record keeping, reporting, and publicity; and for enforcement and sanctions. This chapter first describes and compares the three basic types of environmental regulatory instruments, providing brief examples from domestic and international practice. It then examines experience with their use in domestic settings before turning to the distinctive issues posed by instrument choice in the international context, and experience with the use of various different instruments in international environmental regulatory programmes. It concludes with an agenda of issues for future research.

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  International Environmental Protection and Regulatory Innovation

  Richard B. Stewart

  The commemorative publication for Eckard Rehbinder's 70th birthday on December 15, 2006 honors a scientist who has made great contributions to environmental law. For more than 35 years he has critically accompanied and significantly shaped German, European and international environmental law as an academic researcher and teacher, practical consultant, legal politician and expert. More than 40 articles by nationally and internationally renowned authors focus on “Legal developments and legislation”, “Principles and instruments”, “Sectoral environmental protection”, “Energy law and climate protection” and “European law and international aspects” and reflect Eckard's diverse work Rehbinder again.

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  The Research Exemption to Patent Infringement: The Delicate Balance Between Current and Future Technical Progress

  Katherine J. Strandburg

  Patents are intended to provide incentives to invest in research and development, but they can also make it more difficult to build on the inventions of others either because an improved invention falls within the claims of a prior patent or, as is the focus of this chapter, because the research and development process for a new invention requires the practice of a prior patent. In such cases, prior patentees may be unwilling to license the research use of their inventions on reasonable terms to potential competitors. A research exemption from infringement liability might be used to skirt such prior patentee reluctance, but such an exemption raises the possibility that depriving patentees of control over the research uses of their inventions might diminish incentives to invest in developing them. This chapter reviews current United States law regarding research exemptions and explores proposals for broader research exemptions. The research exemption come in two “flavors”—a statutory exemption for research “reasonably related” to regulatory approval by the Food and Drug Administration and a traditional exemption for noncommercial research based on judicial interpretation of the scope of infringing “use.” The statutory exemption was the subject of a 2005 decision by the United States Supreme Court, while concern about judicial narrowing of the traditional exemption has been reflected in two major national reports and numerous scholarly articles. An important controversy exists as to whether either exemptions should be applied differently depending upon whether the research is aimed at understanding or improving upon the patented invention or uses the patented invention as a research tool. This chapter summarizes arguments in favor of a categorical exemption for “experimenting on” a patented invention. It then addresses the more difficult issue of an exemption for research tool use. Finally, this chapter briefly considers the impact on the research exemption issue of paying more attention to motivations for innovation—in particular the motive of “user innovators”—that do not stem from a desire for commercial compensation.

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  Foreword

  Jeremy Waldron

  The revelations of prisoner abuse and torture at Abu Ghraib and more recently at Guantánamo were shocking to most Americans. And those who condemned the treatment of prisoners abroad have focused on U.S. military procedures and abuses of executive powers in the war on terror, or, more specifically, on the now-famous White House legal counsel memos on the acceptable limits of torture. But in The Story of Cruel and Unusual, Colin Dayan argues that anyone who has followed U.S. Supreme Court decisions regarding the Eighth Amendment prohibition of “cruel and unusual” punishment would recognize the prisoners' treatment at Abu Ghraib and Guantánamo as a natural extension of the language of our courts and practices in U.S. prisons. In fact, it was no coincidence that White House legal counsel referred to a series of Supreme Court decisions in the 1980s and 1990s in making its case for torture. Dayan traces the roots of “acceptable” torture to slave codes of the nineteenth century that deeply embedded the dehumanization of the incarcerated in our legal system. Although the Eighth Amendment was interpreted generously during the prisoners' rights movement of the late 1960s and 1970s, this period of judicial concern was an anomaly. Over the last thirty years, Supreme Court decisions have once again dismantled Eighth Amendment protections and rendered such words as “cruel” and “inhuman” meaningless when applied to conditions of confinement and treatment during detention. Prisoners' actual pain and suffering have been explained away in a rhetorical haze—with rationalizations, for example, that measure cruelty not by the pain or suffering inflicted, but by the intent of the person who inflicted it. The Story of Cruel and Unusual is a stunningly original work of legal scholarship, and a searing indictment of the U.S. penal system.

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  Locke, Adam, and Eve

  Jeremy Waldron

  This collection considers one of the most important figures of the modern canon of political philosophy, John Locke. A physician by training and profession, Locke not only wrote one of the most important and well-known treatises of the modern canon, but also made important contributions in the areas of seventeenth-century law and public policy, epistemology, philosophy of language, religion, and economics. There has been a long-standing debate in feminist scholarship on Locke as to whether this early founder of modern liberal thought was a strong feminist or whether he ushered in a new, and uniquely modern, form of sexism. The essays grapple with this controversy but also move beyond it to the meaning of gender, the status of femininity and masculinity, and how these affect Locke's construction of the state and law. The volume opens with three of the early "classic" feminist essays on Locke and follows them with reflective essays by their original authors that engage Locke with issues of globalization and international justice. Other essays examine Locke's midwifery notes, his treatise on education, his writings on Christianity, his contributions to poor-law policy, his economic writings, and his Essay Concerning Human Understanding. In addition to essays by leading feminist theorists, the volume also includes essays by some leading Locke scholars for whom gender is not normally a primary focus, so that the volume should speak to a wide range of scholarly interests and concerns.

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  Mill on Liberty and on the Contagious Diseases Acts

  Jeremy Waldron

  The health of the roughly 270,000 members of the British armed forces—the Royal Army and the Royal Navy—was a matter of great concern in the middle of the nineteenth century. Most of us know this from accounts of the work of reformers like Florence Nightingale, during and after the Crimean War, in setting up a properly administered system of field hospitals and agitating for general reforms in hygiene and sanitation. A more troubling set of issues concerned the impact of sexually transmitted diseases on health, readiness, and morale. Prostitution was rife on army bases and in garrison towns and ports in these areas; many contemporary and modern accounts accompany this point with the observation that the army did not permit most enlisted men to marry and sometimes also with a reminder that homosexual sodomy was unlawful—from which we are supposed to conclude that the only sexual outlet available to these men was fraught with the risk of disease. Whatever the reason, it is said that approximately one-third of the members of armed forces contracted venereal disease. And this—as the administrators and politicians responsible for modernizing the army and navy came to see—was intolerable. In the 1860s, three statutes were passed by Parliament, known as the Contagious Diseases Acts. They all involved various measures to supervise the health of prostitutes, and they were all focused specifically on port and garrison cities.