When Does This Get Pierced?

If you’ve made it through the content of complaints, some data about who gets sued, and descriptive statistics about wins and losses, you basically are pot committed to this veil piercing project. In this post, I’m going to exploit that commitment by describing the results of our statistical analysis of two different kinds of success that plaintiffs may achieve in veil piercing cases: (1) on motions; and (2) at the case level. If you don’t care to follow me beyond the jump, here’s the bottom line (from our abstract):

“Voluntary creditor causes of action promote veil piercing; LLCs are in very limited circumstances better insulated from veil piercing claims than corporations; undercapitalization is strongly associated with success while conclusory grounds like [...]]]>

When Does This Get Pierced?

If you’ve made it through the content of complaints, some data about who gets sued, and descriptive statistics about wins and losses, you basically are pot committed to this veil piercing project. In this post, I’m going to exploit that commitment by describing the results of our statistical analysis of two different kinds of success that plaintiffs may achieve in veil piercing cases: (1) on motions; and (2) at the case level. If you don’t care to follow me beyond the jump, here’s the bottom line (from our abstract):

“Voluntary creditor causes of action promote veil piercing; LLCs are in very limited circumstances better insulated from veil piercing claims than corporations; undercapitalization is strongly associated with success while conclusory grounds like “façade” and “sham” are not; and defendants’ legal sophistication is predictive of plaintiff failure. Extra-legal factors play a more striking and counterintuitive role. Plaintiffs suing companies with few employees are much more likely to win veil piercing motions, and obtain relief in cases, than plaintiffs suing companies employing many workers. This results holds even when controlling for legally-relevant variables. Contrary to both theory and previous empirical work, we also find that judicial liberalism is inversely related to the likelihood of plaintiff success.”

Veil Piercing Motions

Let’s start with the motions level. We ran a logistic regression, where the dependant variable is plaintiff succeeding at the motions level – - either advancing the veil piercing case (e.g., getting VP discovery), or actually winning – - and a number of our variables of interest reach statistical significance (at p ≤ 0.05 (two-tailed)), including judge ideology, defendant firm size, voluntary creditor-based causes of action, and the presence of the shell, façade, and undercapitalization grounds for piercing in the complaint.* Generally, and in accord with our theory, we get much better model performance when we look at motions-level success than at case-level success.

What does this mean?  Well, consider the effect of being a veil piercing target with more (or less) employees.  For example, the figure indicates that the probability of successfully asserting a veil piercing motion against companies with less than 300 employees being is around 0.80. For companies with more than 2100 employees, that number drops below 0.20.  These results hold when controlling for variables like “being an LLC, or not”, “being incorporated in Delaware, or not”, asserting “informalities as a ground in the complaint, or not”, etc.

By contrast, we find that as a judge’s ideology moves in a conservative direction, the mean likelihood of having successful interstitial veil piercing activity increases.  Motions in cases with very liberal judges have a mean predicted probability of being successful of under 50%, while that probability is around 75% for moderate district court judges and near 95%  for conservative district court judges.  This is, in a word, surprising!

Discrete factors also correlate with success on veil piercing motions.

The bottom portion of the figure to the left contains the plots for the substantive effect of the three veil piercing grounds (in complaints) that have a statistically significant effect on veil piercing motion success: shell, façade, and failure to adequately capitalize (or undercapitalization).  The addition of façade and shell grounds to a veil piercing complaint each provide strong negative effects on the likelihood of veil piercing motions in that case, with a shell ground decreasing the likelihood of veil piercing motion success by over 39%, on average, and a façade ground doing the same by nearly 53%, on average.  Stated undercapitalization grounds have the opposite, albeit more modest, effect.  The addition of an undercapitalization ground to a veil piercing complaint makes an interstitial veil piercing motion 14% more likely to be successful.  We also find (but do not illustrate) that corporations owned by artificial shareholders are more likely to be subject to successful veil piercing motions than LLCs owned by artificial shareholders.

Here’s what this suggests to me: facade and shell grounds in complaint signal/reflect a case that is pretty thin — the grounds are totally conclusory — such claims fall away in cases at higher-than-usual rates.  By contrast, undercapitalization signals a strong case — one that evidences a certain about of seriousness about the veil piercing claim.   With respect to voluntary creditors (i.e., contract claims) recall that plaintiffs can bring both voluntary and involuntary creditor claims in the same complaint.  Still, the expectation from theory was that voluntary creditors ought to win less often than involuntary ones.  We don’t find that.  We find instead that complaints with voluntary creditor causes of action in them are more likely to be associated with veil piercing claims that survive longer.

The corporation-LLC finding is expected.  LLCs are designed to be more informal.  They ought to be pierced less often.

Case Level Success

As I discussed in an earlier post, figuring out what veil piercing success at the case level means is a little bit complicated. We decided to treat veil piercing at the case level as successful if: (1) the veil has been affirmatively pierced by a court through veil piercing motion activity OR (2) when, after veil piercing has been litigated on the record (through motion activity), the case settles while veil piercing is still “alive” in the case (i.e., having never been dismissed or denied).  In the paper, we provide alternative set of results based on the coding of veil piercing success both more narrowly (excluding all settlements) and more broadly (including all settlements where veil piercing is still “alive,” regardless of the affirmative presence of veil piercing motions in the case).

We again find that employee size has an important relationship to success.  Very small firms have a probability of case level veil piercing of around 20%; that number quickly approaches zero as firm size increase. Similarly, the more conservative a district court judge is, the more likely the case he is presiding over is to have a case-level veil piercing success.  This result, of course, mirrors that in the veil piercing motion context.  While the most liberal judge’s case has around a 15% probability of having ultimate veil piercing success, the most conservative judge’s case has around a 30% probability.

Individual factors also matter.  When companies are incorporated in different states from where they operate (holding their size constant) the presence of such sophistication decreases (by about 10%) the likelihood that the firm’s veil will be pierced.  The inclusion of undercapitalization as a ground increases (by about 10%) the likelihood of there being a successful case-level veil piercing.

The last post in this series will discuss these results.

* * *

FN*  We generally do not find statistical significance at the motions level for our variables regarding entity choice,  shareholder identity, defendant sophistication, judge gender or race, appellate court control, or the increased incidence of success when failure to observe formalities, inadequate capitalization, and domination and control were cited as veil piercing grounds against corporations compared to LLCs

There’s value in this approach, not least because opinions shape reality. But there’s a problem too.  Not only are opinions unrepresentative, but they come late in cases.  The result is an extreme form of selection.  It’s not clear (to me, anyway) what the null hypothesis regarding the effect of independent variables  ought to be for late-stage dispositions.

Dockets offer the promise of a different approach: asking which factors correlate [...]]]> If you look at opinions, winning in a veil piercing case is pretty easy to define: did the court agree to pierce the veil, reaching through an entity to its shareholders. If you were inclined, you could model success at those terminal moments in cases, asking which factors (described in the opinions) correlated with courts agreeing to pierce.

There’s value in this approach, not least because opinions shape reality. But there’s a problem too.  Not only are opinions unrepresentative, but they come late in cases.  The result is an extreme form of selection.  It’s not clear (to me, anyway) what the null hypothesis regarding the effect of independent variables  ought to be for late-stage dispositions.

Dockets offer the promise of a different approach: asking which factors correlate with success or failure early in cases.  Further, assuming that adjudicated motions teach the parties about the strength of their cases, and that they settle strategically, we can even start to learn from the timing and incidence of settlement.

In this post, I’m going to relay some descriptive statistics about the veil piercing successes that plaintiffs achieved in our data. (I’m continuing to pull the data and some text from our paper.)  To those who are getting annoyed by all of these posts, I’m sorry!  I’ve been living with this project for a long time — I’m excited to finally share it publicly.

We coded 550 motions raising veil piercing problems, and 580 non-veil piercing motions, in our 690 cases.  Overall, about half of all veil piercing motions result in plaintiffs advancing their veil piercing claims (but not ending the case), about fifteen percent involve judicial determinations against the veil piercing claim, twenty percent success on the merits (if defaults are included), and the remainder of motions were pending at the time of settlement. (Recall that 2 of 3 cases overall ended in settlement).

Excluding defaults, and dropping pending motions, veil piercing litigation is a story of wild early success: plaintiffs prevailed — in one form or another – on approximately 85% of all veil piercing motions in our dataset.  Many cases had their veil piercing claims still “alive” at the time of settlement.  Indeed, using the most liberal definition, which includes settlement after motion practice as victory, 78% of cases resulted in plaintiffs realizing some value from their veil piercing claims.

But very few cases actually led to veil piercing, on the merits, outside of defaults: only 37 cases, out of 690, contained a judicially-enforced veil piercing on the merits.  That’s around 6%.

Moving parties were less likely to win non-veil piercing discovery motions  than veil piercing discovery (a 67% success rate versus 90% in resolved motions) and plaintiffs were less successful at fighting off motions to dismiss (61% plaintiff prevail rate versus 88%) and summary judgment (62% versus 90%).  One explanation for this effect is that veil piercing motions (i.e., demanding VP discovery, or fighting of a motion to dismiss) are somehow not selected out of cases to the same degree that ordinary motions are: defendants either are too attached to them (think they are going to win when they won’t) or plaintiffs insufficiently so (think they lack settlement leverage when they have it).

The advantage of looking at success and failure at the motion-by-motion level is that it promises a chance to move the problem of selection back in cases to a moment where we wouldn’t reasonably expect for plaintiffs and defendants to have a realistic sense of their chances. We can fairly hypothesize that some independent variables — judicial demographics, plaintiffs and defendant characteristics, legal rules and planning — will affect the parties’ respective successes and failures on (say) the grant rate in motions to dismiss.  As I’ll discuss in penultimate post in this series, that intuition turns out to be basically correct.

Confused?  Read the paper!

Citation studies as a proxy for judicial quality are all the rage.  I concur with Larry that the effort spent often seems disproportionate to the result.  Selection is the culprit here, not just academic modesty: it’s hard to imagine that any truly dramatic effects of judicial character, or legal rule, would not be washed away by parties’ ability to settle strategically.

Exogenous shocks open windows – of limited scope – which may help us penetrate this fog.  There’s one ongoing today that I think could in several years allow us to test one of the most important, but obscure, questions about judicial performance.  Although there have been a few studies about the usage, hiring, and quality of law clerks, I haven’t seen work that [...]]]>

Judge food.

Citation studies as a proxy for judicial quality are all the rage.  I concur with Larry that the effort spent often seems disproportionate to the result.  Selection is the culprit here, not just academic modesty: it’s hard to imagine that any truly dramatic effects of judicial character, or legal rule, would not be washed away by parties’ ability to settle strategically.

Exogenous shocks open windows – of limited scope – which may help us penetrate this fog.  There’s one ongoing today that I think could in several years allow us to test one of the most important, but obscure, questions about judicial performance.  Although there have been a few studies about the usage, hiring, and quality of law clerks, I haven’t seen work that really convinces me that clerks change judicial performance (rather than match it).  That question of influence is pretty important for all kinds of reasons — not least because if law clerks were really influencing their judges, we might want to spend a little bit more time thinking about their roles, ethics, hiring, etc.

So what’s the shock?  I think that the period of 2008-2011 will prove, in retrospect, to be bumper years for clerk quality.  Anecdotally, I’ve heard that the clerkship market has never been more competitive: Yale grads have been encouraged to take state court clerkships (the horror); judges in popular jurisdictions are receiving literally four to five thousand applications per clerk year; individuals who before might have taken firm jobs are instead throwing their hats in the ring; magistrate judges are taking clerks previously destined for district judges; alumni in practice for five years are going back into the clerk market and competing with fresh-faced 3Ls.  As an organ of the government, the judiciary simply eats better brains when the economy stinks.

Assuming the effect is real (which we could test by looking at placement statistics), I’d propose that eight to ten years from now – in 2018 or thereabouts – we test whether opinions arising from this bumper-clerk period are cited at a higher rate than opinions from the ordinary market periods immediately preceding and following.  The hypothesis would be that if clerks influence judges to write better opinions, better clerks will produce to more citable opinions.  Notably, we can’t perform this same analysis on the effect of past recessions, as (1) they reportedly didn’t have the same effects on the clerkship market; and (2) opinion collection practices were really sporadic before 1995.  It’s 2018 or bust.  Mitu et al., I call dibs!

Starting with the [...]]]> As I described yesterday, Christy Boyd and I have collected a representative sample of veil piercing complaints and have written up some of our analysis of that data in Disputing Limited Liability. Before talking about the meat of the project — the wins and losses — I’ll describe another piece of information that you can extract from complaints but not opinions: who gets sued.  In the 690 cases in our sample, plaintiffs sought to pierce the veil of 870 entities.  With the generous support of Temple’s Law Library, we purchased information about those entities from Dunn & Bradstreet, including the number of employees and revenues per firm, corporate structure, and organizational home.  After the flip, I’ll give you a taste of our findings.

Starting with the basics, approximately eighty-five percent of the entities to be pierced are corporations and thirteen percent are LLCs, meaning that just over two percent compose other forms.  The following figure examines the ownership of such entities, looking only at the domestic corporations and LLCs, and ignoring other entities entirely.

The shareholder makeup of LLC and Corporations to be pierced. This Figure drops other entities (including mostly foreign companies) from the analysis. "Entity Mix" refers to groupings of individual and entity shareholders, or LLCs and Corporations together as shareholders.

Notably, natural people own about equal percentages of the LLCs and Corporations in our data: 70%.  The remainder consists of artificial owners.  This implies, of course, that most veil piercing plaintiffs in our sample seeks to pick the pocket of ordinary people.  Cases in which veil piercing looks more like a bankruptcy consolidation are rare.

Now, you might ask where such companies were incorporated and/or organized.  Based on the work of Jens Dammann and his co-authors, we had believed coming into our analysis that companies might change their legal home depending on a jurisdiction’s treatment of veil piercing claims.  (They would migrate away from liberal jurisdictions and toward strict ones.)  Thus, identifying the state of organization/incorporation was important for our project’s later inferential analysis.

Both of the above figures display the the incorporation/organization choices for entities with a non-trial number of observation in the data.  As you can see, Illinois is a surprisingly prominent entrant.  The reason?  ERISA veil piercing practice by Chicago firms! Otherwise, the picture isn’t all that interesting.  But what happens if we ask whether firms are incorporated/organized in a different jurisdiction from the one that they are doing business in?

The black portion of the bar chart indicates the number of entities in the state that are both incorporated/organized there and that operate there. Light grey indicates that the entity is only incorporated/organized in the state but does not operate there or vice versa. Dark grey shows the number of entities that are operating in the state but for which we do not have data on their state of incorporation/organization.

Here we see that Delaware, which attaches to a very large number of the entities to be pierced, is the operating home to very few.  Such firms are both larger and more legally sophisticated than the mean.  By contrast Illinois, which produces lots of entities to be pierced, is basically represented by very small mom & pop businesses.

The cool thing about this variable is that enables us to get, for each entity in the dataset, a very rough, but very clean, approximation of its legal sophistication.

We also collected information about employment.  Of the firms to be pierced,  fifty-five percent employed ten individuals or less.  Twenty-six percent reported 11-50 employees; six percent had 51-100 employees; seven percent had 501-1000 employees; and four percent had more than 1001 employees.  That last statistic is pretty striking, from a particular point of view. It’s often remarked that in the history of the United States, no one has successfully pierced a public company.  (We have no idea if this is actually true. But it feels true.)  But we observe around 50 cases in our data where someone tried to pierce a firm with more than 1000 employees – some firms employed more than 30,000 workers and were public.  If it’s true that public companies are immune from veil piercing, it’s not for lack of trying.  That might lead you to think of plaintiffs lawyers asserting veil piercing complaints as the Don Quixotes of the commercial litigation bar.  If you take as your measure of success a merits based judicial determination that the veil ought to be pierced, you’d be right.  But, as I hope to convince you in my next post on this topic, that’s the wrong way to think about success.

The obvious one is that judicial opinions are the public good that the parties prompt society to buy.  The price we would pay for any kind of litigation reform would be [...]]]> Eugene Volokh (among many others) recently posted the opinions in Klein v. Amtrak, the now famous EDPA unpublication case involving a settlement that led to the vacating of eight defense-unfriendly district court opinions.  Although commentators across the web seemed surprised, in my experience the practice of asking a judge to vacate an opinion that produced a settlement is fairly common – this particular instance is only a small variant on the ordinary case.  But Klein provides the opportunity to reflect on some of the unexpected benefits that we get from our ridiculous court system.

The obvious one is that judicial opinions are the public good that the parties prompt society to buy.  The price we would pay for any kind of litigation reform would be fewer public decisions, and thus more uncertainty of the kind that unpublication like Klein promotes. The Third Circuit in particular was known for years for having very thin law  – indeed, the late Chief Judge Eddie Becker of the Circuit famously led a one-man crusade against the dearth of law by writing copious dicta.  The certainty that we get from having opinions strongly suggests that we should resist private attempts to keep the law secret – and should be similarly skeptical of the courts’ unwillingness to free PACER. Here, it appears merely that Judge Stengel asked WL and LEXIS to remove his opinions from his databases.  Thus, like 80% of all substantive orders, they are on the docket, but aren’t available to the general public.

There’s an additional private benefit that accompanies litigation which is less illuminated by Klein: the parties get to communicate with one another.  Given a regulatory regime that prohibits competitor contact, litigation can be the best way for companies to talk to one another (through discovery and signalling about which positions to take).  That litigation-mediated-communication is one reason why some companies might prefer to continue to fight in the public system, rather than in commercial arbitration, where their ability to get discovery may be limited.  Again, this isn’t to say that all lawsuits are worth the time and expense that the public invests in settling them, but it does suggest that litigation reform needs to account for these substantial litigation spillovers.

Langer and Doherty examine whether procedural reforms at the International Criminal Tribunal for the former Yugoslavia (ICTY), which were introduced to expedite the tribunal’s proceedings, were in fact successful. The study finds that these so-called “managerial judging” reforms-e.g., introducing pretrial judges, mandating pretrial conferences, asking the parties to exchange information about their cases earlier in the [...]]]> Máximo Langer and Joseph W. Doherty at UCLA have just posted Managerial Judging, Court’s Limited Information and Parties’ Resistance: An Empirical Assessment of Why the Reforms to Expedite Procedure of the International Criminal Tribunal for the Former Yugoslavia Did Not Work. It’s an excellent piece and a rare example of empirical work in international criminal law. Its findings show the valuable contributions that empirical studies could make to the field.

Langer and Doherty examine whether procedural reforms at the International Criminal Tribunal for the former Yugoslavia (ICTY), which were introduced to expedite the tribunal’s proceedings, were in fact successful. The study finds that these so-called “managerial judging” reforms-e.g., introducing pretrial judges, mandating pretrial conferences, asking the parties to exchange information about their cases earlier in the process, encouraging them to reach agreements on facts and legal issues, and reducing the number of witnesses-failed to accomplish their intended purposes. In fact, many of these reforms lengthened the proceedings.

The study controlled for a number of variables that could explain the result (e.g., specific case characteristics, court capacity, and guilty pleas). So why might the reforms have failed? The main reason seems to be that the new managerial tools were not used frequently enough. Moreover, the tools that were used added procedural steps that took up time, without reducing other procedures to make up for the added time.

According to Langer and Doherty, the managerial tools were not frequently used for three principal reasons: 1) under a largely adversarial system such as the one at the ICTY, judges have limited information about the case at the time they have to make decisions to streamline the proceedings; accordingly, they are reluctant to use managerial tools to shorten the proceedings because such tools may also lead to inaccurate or unfair outcomes; 2) the ICTY has not attempted to train, monitor, or incentivize judges to implement the managerial reforms consistently; 3) both prosecutors and defense attorneys have little incentive to expedite proceedings and prefer instead to maintain control over their cases.

The authors conclude by arguing that their findings should not be taken as disheartening. They point out that, in international criminal cases, managerial judging may often interfere with the goal of reaching accurate and fair outcomes. ICTY judges were therefore correct to be cautious in implementing the managerial procedural reforms.

There will soon be another ground for the authors to test their conclusions. At the permanent International Criminal Court, which follows a more inquisitorial model, judges would receive the evidence disclosed by the parties early during the pretrial stage. This may minimize one of the major problems that Langer and Doherty found with the ICTY procedural reforms-that judges lacked sufficient information about the case when deciding whether and how much to streamline the proceedings. Because ICC judges would have a better grasp of the case and more extensive information early in the process, they may be better able than their ICTY counterparts to expedite proceeding without interfering with accuracy and fairness. As the ICC begins trying more cases, Langer and Doherty-and others interested in the empirical study of international criminal procedure-should have extensive opportunities for further analysis.

So, while I cannot yet tell you who the most activist judge was in 2008 because I have only reviewed data from five circuits, I can share my preliminary results for a few higher profile judges, including the most recent nominee to the United States Supreme Court. Here are the activism scores based upon my preliminary data for some of the highest profile judges in the Second, [...]]]> In my last post, I gave some results based upon collective groupings of appellate judges. In this post, I want to focus on the performance of individual judges. The primary reason that I am working to create a relatively large dataset is to allow for individual judge assessments. That has not been possible with the existing appellate court databases.

So, while I cannot yet tell you who the most activist judge was in 2008 because I have only reviewed data from five circuits, I can share my preliminary results for a few higher profile judges, including the most recent nominee to the United States Supreme Court. Here are the activism scores based upon my preliminary data for some of the highest profile judges in the Second, Third, Fourth, Seventh, and Eighth Circuits ranked from most activist to least activist:

As noted in the chart, my average activism score is -10.40%. That means Judge Sotomayor, who is highlighted in green, is less activist than the average judge in my dataset. I have highlighted in red the other judges that were rumored to be on President Obama’s shortlist. As I have noted elsewhere, Judge Sotomayor is slightly more activist than average in criminal cases, perhaps owing to her extensive experience in that area of law. Although one of the primary attacks on Judge Sotomayor is her alleged judicial activism, I do not think such an attack is supported by her record in 2008. I would be interested in seeing any data which actually supports a charge of activism. Simply cherry picking a few cases over the long period she has been on the appellate judge or relying on sentences out of public statements gives almost no insight into Judge Sotomayor’s overall judging philosophy and technique. Further, such selective review of cases and speeches offers no information about how similarly situated judges have performed during the same period.

Outside of Judge Sotomayor, I wanted to highlight a couple other judges in my chart: Judges Posner, Easterbrook, and Wilkinson. Those three are notable because they have taken the unusual step of writing generally about judging and specifically about activism. Based upon my reading of their writings, I think all three judges perform as you might expect. I think a fair, but crude, assessment of Judge Posner’s perspective on how a judge should decide a case is: “if it’s broke, fix it.” We would expect that Judge Posner would not be particularly deferential to the opinions of others if he thinks that they are in error. Thus, we might expect the data to show, relatively, that Judge Posner is more activist. Judge Easterbrook has openly lamented the activism of judges. We might then expect him to be substantially less activist than an average judge. Judge Wilkinson has been perhaps the most aggressive judge in attacking judicial activism. He even vocally targeted the United States Supreme Court decision in Heller even though that opinion probably fits with his policy ideology. Judge Wilkinson, then, might be expected to be among the least activist judges. That all three judges fit with some of the information we have about each of them might indicate that the data I have collected is a valid indicator of an individual judge’s activism.

I should note that activism by judges is not inherently a negative quality. On the other extreme, a judge who is too deferential to other constitutional actors might not be adequately fulfilling his or her responsibilities under the Constitution. Such a judge may simply be acting as a rubber stamp by failing to exercise proper judgment. Further, since my measure is only relative between judges, I do not attempt to describe what the “ideal” amount of activism by a judge is. So, nothing here should be taken as a disparagement of a particular judge. My hope is simply to add more data to understanding judges and judicial behavior.

As I mentioned previously, this is an ongoing project so I welcome comments and suggestions. As this will be my last post, I wanted to thank Dan, Dave, and the rest of Concurring Opinions for having me here.

One of the most remarkable things I have found so far is that, although each of the circuits has a relatively consistent reversal rate, the activism scores vary by significant margins. The chart below shows the reversal rates and activism differentials for each of the five circuits that I have examined:

The activism scores are negative numbers with the higher numbers indicating a higher degree of activism. Thus, the 3rd Circuit is the most activist and the 4th Circuit is, by far, the least activist.

Of course, one thing that is always interesting to look at is which [...]]]> In my previous post, I finally got around to explaining my measure of judicial activism. In this post, I will give some of the results based upon my preliminary data.

One of the most remarkable things I have found so far is that, although each of the circuits has a relatively consistent reversal rate, the activism scores vary by significant margins. The chart below shows the reversal rates and activism differentials for each of the five circuits that I have examined:

The activism scores are negative numbers with the higher numbers indicating a higher degree of activism. Thus, the 3rd Circuit is the most activist and the 4th Circuit is, by far, the least activist.

Of course, one thing that is always interesting to look at is which President’s appointees are the most activist. Here are the results I have so far:

This chart should be taken with a very large grain of salt. Although in some senses, I already have a large amount of data, in others I have very limited sample sizes. When I start analyzing data that uses the judge as a unit of measure, I only have 52 judges with adequate sample sizes. So, there are few representatives for some presidents. That is also why I am not including any regression analysis in these posts. I include this chart simply to show one of variables that I will explore in regards to activism. Other examples of variables I will examine include background experience (district court, private practice, prosecutor, law professor, etc.), conditions at the time of the appointment (election year, unified government, etc.), and other assorted factors (law school attended, activism in particular areas of law, ABA ratings, etc.).

As this project is still ongoing, I welcome any comments and/or suggestions. In my next, and probably last, post, I will give some information about some high profile judges including Judge Sotomayor.

Update: Based upon popular demand, I have changed the second graph to a bar chart.

Since judicial activism at its core is about substituting judgment of other constitutional actors, for federal appellate courts it makes the most sense to study where they do most of their work: reviewing the judgments of district courts. That ensures large sample sizes, wide coverage of different areas of law, and decisions that are still restrained so some non-activist baseline can be derived.

To that end, standards of review offer a powerful tool to understand judicial decision making at the federal appellate level. There are deferential (i.e. clear error) and non-deferential (i.e. de novo) reviews [...]]]> In my last post, I briefly described the major approaches to studying activism. In this post, I will outline my measure for the concept as well as the contours of my dataset.

Since judicial activism at its core is about substituting judgment of other constitutional actors, for federal appellate courts it makes the most sense to study where they do most of their work: reviewing the judgments of district courts. That ensures large sample sizes, wide coverage of different areas of law, and decisions that are still restrained so some non-activist baseline can be derived.

To that end, standards of review offer a powerful tool to understand judicial decision making at the federal appellate level. There are deferential (i.e. clear error) and non-deferential (i.e. de novo) reviews of district court judgments. As you can see from the chart below derived from my dataset, standards of review do affect reversal rates.

So, what can we learn from standards of review? I contend that by comparing a judge’s reversal rate in non-deferential cases with the reversal rate in deferential cases, we can effectively measure the concept of judicial activism. So, appellate judges are more “activist” when they reverse district court judgments under a deferential standard at a higher relative rate compared to reversals using a non-deferential standard. My exact measure (or activism “score”) for activism is reversal rate in non-deferential cases minus the reversal rate in deferential cases. This measure captures when a judge is not deferring to other constitutional actors when we would normally expect him or her to do so. 

The measure has the advantage of not being based upon the substantive outcome of the case. A judge can use either a deferential or non-deferential standard and still find for either party. Since we might think that activist judges are not keen to make clear that their decisions are actually activist, looking at substantive outcomes can be tricky as judges try to mask an appearance of activism. Since standards of review are usually non-controversial (in that the parties rarely dispute over which standard applies) formal rules, we might think that there will be less ability for judges to mask their activism. Ultimately, the failure to defer by a judge over time indicates a relative propensity for activism even if we cannot say for certain that any individual decision is activist. As will be clear in my next post, judges vary quite a bit in their deference under standards of review.

My dataset thus far includes all 2008 cases that used standard of review related words (except habeas and immigration cases) for five circuits: the 2nd, 3rd, 4th, 7th, and 8th. Eventually the dataset will include all eleven numbered circuits as well as the D.C. Circuit. The dataset covers 3,873 cases and 11,583 judicial votes. Each vote is coded for, among other things, standard of review, type of vote, and type of case. I have also integrated biographical information for each judge to determine if background or demographic characteristics are related to judicial activism.

In my next post, I will detail some of my results based upon my preliminary data.

The existing empirical scholarship is largely focused on two things: activism by the U.S. Supreme Court and judicial review of the other federal branches. While there is a lot of interesting work within those studies, I think the focus on Supreme Court review of other branches offers an extremely narrow view of judicial activism.

The Supreme Court is an unusual body in American courts. It is not subject to any higher review. The Justices are largely free to decide a case however they feel. As a result of the unrestrained nature of the Court, “activism” [...]]]> In my last post, I offered a new definition of judicial activism as applied to federal appellate judges. In this post, I will discuss some of the existing research on the subject.

The existing empirical scholarship is largely focused on two things: activism by the U.S. Supreme Court and judicial review of the other federal branches. While there is a lot of interesting work within those studies, I think the focus on Supreme Court review of other branches offers an extremely narrow view of judicial activism.

The Supreme Court is an unusual body in American courts. It is not subject to any higher review. The Justices are largely free to decide a case however they feel. As a result of the unrestrained nature of the Court, “activism” is a hard concept to measure. There is difficulty in finding a baseline against which to measure the Justices. A Justice who is an outlier on one Court might have regularly been in the majority during a different era.  The problem of measuring activism is compounded by the Court’s very small docket. Because there are so few cases, the sample sizes are not large. Further, because the docket is self-selected, the cases are not random and are concentrated in just a few areas of law.

Studying federal appellate courts is more informative because the courts are restrained and are responsible for defining much more of federal law and other issues in federal courts. As the Supreme Court’s docket as shrunk, the Courts of Appeals have increased in importance. Further, as is the case with Sotomayor, studying appellate judges can give you more information about a Justice before they join the Court rather than waiting until someone has life tenure and is unreviewable. Because federal appellate courts are limited by the decisions of other panels, en banc review, and U.S. Supreme Court law and review, it is much easier to establish a baseline against which to measure activism.

The emphasis on inter-branch relations in activism is also problematic. Again, there are very small sample sizes since only rarely do courts review the constitutionality of legislation or other branch actions. There is also a problem in deciding which acts of judicial review are “really” activist. Not all Court actions striking down legislation are created equal. The focus on inter-branch review is particularly problematic for federal appellate courts since those cases are an incredibly small percentage of the overall docket.

As a result, to better appreciate and understand the concept of judicial activism, I believe it is helpful to move beyond the Supreme Court and to consider actions by the courts other review of other branches. 

In my next post, I’ll describe my measure and my existing dataset.

Let’s start with the obvious.  Most appellate court opinions aren’t subject to a cert [...]]]> Via TPM, I found that critics of Judge Sotomayor have made some hay of her reversal rate in the Supreme Court (50% of 6 cases heard).   Though I like data more than the next guy, I will freely admit that this use of quantitative empirical legal studies is demonstrably silly.  I’m going to try to demonstrate to you in this post that a reversal rate of fifty percent is exactly what the state-of-science would predict to be ordinary [or even below average], and a rate of zero (which some might think of as emblematic of a law-abiding judge) tells you that the judge in question might be departing quite severely from precedent.

Let’s start with the obvious.  Most appellate court opinions aren’t subject to a cert petition; almost no cert petitions are granted; only some granted cert petitions end up in full argument and a written opinion by the Supreme Court.  Throughout this long process, parties may settle their cases and exit the system.  They may do soduring briefing before the appellate court or after argument (with some limitations), they may settle after an opinion issues but before a cert petitition is filed, and they may settle thereafter until the Court rules (again, with some limitations based on mootness doctrine).  This potential for settlement after the appellate court issues its mandate creates selection effects.

Though such selection effects are likely less predictable & more dominated by wealth & party characteristics than the immense selection that occurs in the district court, it remains that case that the universe of cases that survive the decision to appeal and the decision to grant certiorari is significantly winnowed.  That winnowing produces a distinct set of cases.   Cases before the Supreme Court contain legal & factual issues more finely balanced than those that issued from the courts below.  To put it another way, cases are argued (usually) because the parties both believe they are going to win.  If the parties are rational & wealth neutral, an assumption that sometimes holds, we should expect that the resulting decisions from the Court will be a bit of a random walk.  (See my earlier post on bankruptcy scholarship for more on this hobby-horse of mine.  Also, note that much of this applies to civil cases, not criminal cases, which create unique settlement patterns.  The actual rate of reversal, over all cases, ranges between 60 and 75%.)

What’s the upshot?  An appellate judge’s “reversal statistic” tells you less than you think about the “merits” of her opinions, or even how such opinions stacked up against governing Supreme Court precedent.  Ironically, when a judge significantly departs from precedent either for or against the plaintiff, settlement may be particularly likely, as the parties’ chances above are quite clear: thus a judge who convinces her colleagues to depart from precedent often will almost never be reviewed or reversed by the Supreme Court. Cases where the judge stuck with precedent, by contrast, may face appeal and reversal, especially if the precedent shifted due to ideological change on the Court itself.

There’s lots of good work on this, much of it recent.  And what it teaches me is that we have no idea what an appropriate reversal rate for an appellate judge ought to be.  It also suggests that there is no way to evaluate the quality of an appellate judge’s work except to read her opinions and decide for yourself what you think of them.  This is a clear instance where statistics mislead.

My first concern with the study is that the twelve variables that SIGI has chosen to measure social institutions and their [...]]]> I’m normally a fan of the statistical reports produced by the OECD, so was surprised to find myself in disagreement with the methodology of their recently-created Social Institutions and Gender Index (SIGI). The idea behind SIGI is a good one — to get at the root of gender discrimination by examining traditions and social norms that impede women’s empowerment. To this end, SIGI assesses twelve variables in 102 non-OECD countries and then ranks these countries based on their “performance in social institutions.” The selection and evaluation problems with their study highlight the difficulty of empirically measuring and ranking intangible phenomena such as social norms.

My first concern with the study is that the twelve variables that SIGI has chosen to measure social institutions and their contributions to gender inequality appear to suffer from selection bias. Their model does include variables that impact women’s advancement globally, such as access to land and property and inheritance laws. However, given the relatively small number of variables examined, it was surprising to see the inclusion of discriminatory traditions and social norms practiced only in a limited number of regions, such as female genital mutilation, restrictions on freedom of dress and “missing women” (gender-selected abortion or infanticide) as stand-alone variables. To be sure, these forms of hidden discrimination are of concern, but if it’s to include traditions and social norms that impede women’s progress only in certain regions, the study should be as comprehensive as possible, including a broad range of regionally specific discriminatory norms (such as very limited access to contraception and abortion in much of Latin America). Alternatively, the study could be limited to variables that exist in nearly every country studied, with regionally specific norms as a subset but not a stand-alone variable (examining FGM as one manifestation of violence against women, for example). The study’s current approach inappropriately weights these variables and thus leads to odd results in the rankings — India, for example, is ranked 96 of 102 countries, just below Iran. While there’s no disputing that India has its fair share of hidden forms of gender discrimination, a claim that Indian women face more discriminatory norms than Iranian women is difficult to defend.
The study also appears to contain evaluation problems in that it relies on the law on the books to measure social norms without closely examining whether this law is applied in practice. So, for example, I was surprised to see El Salvador ranked number 8, with a mention of violence against women as a “serious problem” but nonetheless receiving an extremely high score for physical integrity. In contrast, the U.S. State Department’s 2008 Human Rights Report denotes violence against women as one of the top human rights problems in El Salvador, with over 6000 reports of domestic violence and only 12 prosecutions and 4 convictions last year. Again, it’s hard to take seriously an index that ranks highly a country with social norms that widely condone violence against women.
While the authors of the study are correct in their claims that these traditions and social norms often impede progress towards equality for women, it is extremely hard to quantify such intangible phenomena. Social norms and traditions that impede women’s empowerment take different forms throughout the world, and do not lend themselves easily to comparative assessment. More importantly, I’m not sure where the value lies in “ranking” hidden forms of gender discrimination. How should these rankings be used? To determine which countries should be prioritized in efforts to ameliorate gender discriminatory norms? As a shaming sanction against those at the bottom of the list? While it’s undoubtedly important to examine and elucidate these norms in order to redress them, it seems less worthwhile to measure and sort them, as if eliminating gender inequality were simply a numbers game. And as SIGI’s pitfalls illustrate, such a study should be performed by researchers familiar with the societies and cultures in question and should not rely on laws on the books as an adequate proxy for social norms. Moreover, any such study should rigorously select and weight quantitative or qualitative measures of discriminatory norms to avoid culturally biased and unreliable results.

Cross-posted on IntLawGrrls.

A draft paper by Raymond Fisman (Columbia Business),  Shachar Kariv (Berkeley Economics) and Daniel Markovits (Yale Law) has gotten surprisingly little attention given its potentially radical implications.  Maybe it’s the title: Exposure to Ideology and Distributional Preferences. I would have gone with something different.  Perhaps “Law and Economics Eats Law Students’ Hearts.”

The authors looked at first-year students at Yale Law School taking contracts and torts.  They labeled the students’ professors by their purported tendency to emphasize economic and “humanist” rhetoric in class.*  They then used the natural experiment of law school sorting to determine the effect that exposure to economic ideology had on law students’ distributional preferences in the dictator game. That is, did students taught by economically-minded [...]]]>

Richard Posner. Founder. Latter-Day Apostate?

A draft paper by Raymond Fisman (Columbia Business),  Shachar Kariv (Berkeley Economics) and Daniel Markovits (Yale Law) has gotten surprisingly little attention given its potentially radical implications.  Maybe it’s the title: Exposure to Ideology and Distributional Preferences. I would have gone with something different.  Perhaps “Law and Economics Eats Law Students’ Hearts.”

The authors looked at first-year students at Yale Law School taking contracts and torts.  They labeled the students’ professors by their purported tendency to emphasize economic and “humanist” rhetoric in class.*  They then used the natural experiment of law school sorting to determine the effect that exposure to economic ideology had on law students’ distributional preferences in the dictator game. That is, did students taught by economically-minded professors behave differently than those taught by professors disposed toward humanism or critical-legal studies?

The bottom line: students taught by economically-minded professors were both more selfish and more likely to see fairness as a form of kaldor-hicks efficiency.  By contrast, students taught by humanists were more generous and also  likely to see fairness as a matter of equity.

These are important results for those interested in legal education.

• First, and most obviously, it suggests that our preferences for altruism and the content of fairness are highly manipulable — one semester of teaching by a professor – at Yale, no less – can affect them.  I admit to being a bit surprised by the size of the effect, given the mixed results from earlier work on the relationship between economics and altruism.  It’s also surprising that Yalies are so impressionable!  I wonder whether the effect persists past a semester, and whether better coding of actual classroom discussion would have changed the results.
• Second, it suggests yet more reasons for researchers to think hard about the effect that law school teaching has on the content of legal doctrine.  As I’ve argued, it’s quite likely that some law school professors who never published a lick have had more effect on substantive legal doctrine than those who’ve written reams, simply by influencing how their students (who went on to be lawyers and judges) thought about the content of rules and the byways of arguments.  We should do more work like this!
• Third, and most personally, this makes me nervous.  I’m a highly socratic teacher who places lots (and lots) of emphasis in the first-year on efficiency-arguments and on the need to look beyond questions about distributional equality in the present case.  I thought that by doing so I was helping students to think critically about the dynamic nature of contract law – the relationship between contract rules and market price; the usefulness of an intelligent system of defaults; the importance of getting beyond gut intuitions.  But maybe I’m also indoctrinating the students to grab more of the pie for themselves.  Nuts.

*The method they used to code economic preferences was, to be frank, a little mystifying.  They gave points for PhD’s in economics, but had to make exceptions for Alan Schwartz, PhDless but L&E to the bone, Guido, for obvious reasons, and both Robert Gordon and Carol Rose, who are similarly off-set.  Why not simply ask the professors themselves how much they emphasized economic rhetoric in class?  Or the students?

In the last post, I suggested that  we shouldn’t be selecting for judicial smartness, at least standing alone.  Here, I’d like to add my two cents to the pile of unsolicited, and likely unused, advice for the Obama vetting team.  The Administration should give some thought to picking a Justice who has prior background working with statistics, data collection, and more general empirical methods.

The footnote 17 debacle is, of course, a recent and salient example of how the Court can go wrong when evaluating empirical work:

“Cornell law professor Jeffrey Rachlinski told the Times that [Ted]  Eisenberg’s study shows “punitive damages are pretty orderly,” yet Souter did not seem to think any studies had [...]]]>

The 14th Amendment does not (yet?) enact Mr. Herbert Spencer's Social Statics.

In the last post, I suggested that  we shouldn’t be selecting for judicial smartness, at least standing alone.  Here, I’d like to add my two cents to the pile of unsolicited, and likely unused, advice for the Obama vetting team.  The Administration should give some thought to picking a Justice who has prior background working with statistics, data collection, and more general empirical methods.

The footnote 17 debacle is, of course, a recent and salient example of how the Court can go wrong when evaluating empirical work:

“Cornell law professor Jeffrey Rachlinski told the Times that [Ted]  Eisenberg’s study shows “punitive damages are pretty orderly,” yet Souter did not seem to think any studies had proven that point.

The Times asked Eisenberg for his reaction and summarized his response this way: “Professor Eisenberg struggled to stay respectful about the court’s approach to his work, saying he had been flattered to be cited at all. He finally settled on this phrase: ‘I believe the court went seriously astray’ in concluding that his work supported a reduced award.”

Statistical problems before the Court aren’t new – Brown & McClesky both come to mind – but it is likely that the Court will face increasingly sophisticated empirical methods  in briefs over the next generation. Not only has the Supreme Court bar gotten much more sophisticated, but so have the underlying methods in empirical legal scholarship. As methods grow more sophisticated, it becomes harder for judges to play referees, since the errors (if any) in the parties’ positions are more subtle.  A Justice who could be an intelligent consumer of empirical work, rather than a credulous user, would be a huge bonus.

That’s not the same as saying that a Ph.D. in stats, or political science, ought to be a credential.  Lawyers who have litigated complicated employment, antitrust, or securities cases have to deal with statistics experts and are well exposed to the kinds of questions that need to be asked about their analyses.  To a lesser extent, so are judges who have sat on such  large commercial cases.  The point is that at least some exposure in statistics and social science techniques is quickly becoming part of a well-rounded legal education. It should also be part of what we look for in a Justice.

[Update: Michael Heise has more.]

ROBIN MALLOY

Law and Entrepreneurship offers many opportunities for interdisciplinary work and for finding common ground among the various categories of property (real, personal, intangible, cultural, IP, etc.) The recent Conference at Wisconsin [...]]]> I recently wrote about the Creativity, Law and Entrepreneurship Workshop at the University of Wisconsin in which I participated. One of the speakers, Robin Malloy who is the E.I. Chair and Distinguished Professor of Law at Syracuse University College of Law,  emailed me and about the ideas he presented. I am quite interested Robin’s ideas and approaches to this area of the law, so I asked whether he would mind writing a short piece to share with our readers. He was gracious enough to agree. So I am pleased to offer Robin Malloy:

ROBIN MALLOY

Law and Entrepreneurship offers many opportunities for interdisciplinary work and for finding common ground among the various categories of property (real, personal, intangible, cultural, IP, etc.) The recent Conference at Wisconsin on Creativity, Law and Entrepreneurship highlighted this exciting possibility. In thinking about property transactions and entrepreneurship I believe there are at least four central starting points, all of which can be expanded. 1) It is important to get beyond definitions of property and look at what we can do with property… to look at transactions in exchange (asking not just what is property but also, and more importantly, what can we do with property). And from the perspective of market exchange theory asking how we capture and create value from transactions in property. 2) Entrepreneurship requires us to develop a more complex vocabulary. We need to start thinking about a variety of types of entrepreneurship instead of always dealing in an abstract sense with just one big category called “entrepreneurship”, as if all entrepreneurship is of the same type or kind. We need to develop more nuanced categories of entrepreneurship based on different observable patterns of behavior and motivations as they might relate to different types of transactions and different categories of property. 3) Creativity is key to entrepreneurship and this requires us to incorporate a theory of interpretation because creativity requires both an understanding of current boundaries of meaning and a recognition of a possibility for setting new boundaries. Recognizing something as new, of course, requires a cultural-interpretive reference point and, thus, interpretation theory is key to understanding a set of given relationships and to imagining the potential for something new and different. 4) The relationship between law and entrepreneurship requires a dynamic approach to market theory. Traditional efficiency analysis is not entirely helpful since it is really a status quo analysis with little application to creativity. Efficiency is directed at thinking about ways of allocating already known resources and not about the market conditions under which creativity, innovation, and discovery are best facilitated. This means that there is a need to think creatively about the meaning of markets and the tools we use to understand law in a market context.

Those details are below the break. Before that, I want to say that Wisconsin was a great host. The group was excellent. Each paper linked in some way to the other papers in its session. In addition, the pace was perfect. Three papers per session allowed one [...]]]> On Friday I was in lovely Madison, Wisconsin for the Creativity, Law and Entrepreneurship Workshop which Shubha Ghosh put together and was sponsored by UW Law School, the Institute for Legal Studies, the Initiative for Studies in Technology Entrepreneurship (INSITE), and the Global Legal Studies Center. I’m afraid I don’t have the ability to capture everything that happened, but I will try and call out what each panel did (although the link above sets out the program and speakers).

Those details are below the break. Before that, I want to say that Wisconsin was a great host. The group was excellent. Each paper linked in some way to the other papers in its session. In addition, the pace was perfect. Three papers per session allowed one to present the core ideas of the paper and have plenty of time to get into the discussions. Furthermore, it was a a great pleasure to have the business school folks attend. I, for one, was able to get valuable feedback and learn about some literature that looks like it will help my work in general. In short, thanks to Wisconsin and all those who put together the event for a job well done. Now on to the panels.

The first panel topic was Social Entrepreneurship; the second, Creativity in Business & Social Contexts; the third, Lawyering & the Creative Process; and the final panel, Creativity & Construction of Legal Rights.

The Social Entrepreneurship panel consisted of:

Lisa Alexander (Assistant Professor of Law, University of Wisconsin Law School)

“Restoring Trust in Microenterprise Financing: Communities, Markets, Social Capital & Law”

Megan M. Carpenter (Associate Professor of Law, Texas Wesleyan University School of Law)

“From Coal to Content: The Role of Intellectual Property in Transitional Economies”

Robin Paul Malloy (E.I. White Chair and Distinguished Professor of Law, Vice Dean, and Director of the Center on Property, Citizenship, and Social Entrepreneurism, Syracuse University College of Law)

“Real Estate Transactions, Market Exchange Theory, & Entrepreneurship”

with Shubha as Chair and Discussant.

To me all three talks raised the question of what system allows for entrepreneurship. Lisa and Megan addressed different views of what entrepreneurship means to specific groups. Lisa is looking at low income communities and the ways that they stimulate entrepreneurial activity. In addition her work aims to draw on social capital theory. Megan’s work asked what is intellectual property’s role or could be in transitional economies. She offered that universities, legislation, and shoring up IP law could together stimulate such economies. Robin’s work went to the heart of how property operates. He argued that we can conceive of property real or otherwise as part of market exchanges (I apologize as I am sure I am missing some of the nuance in Robin’s talk). He connected the idea of markets to entrepreneurs by arguing that the entrepreneur sees a place where the system is not matching what he knows to be possible and that is opportunity in his view. So the question is what system will encourage people to say they want to be the first baker, butcher, software maker.

Creativity in Business & Social Contexts, was the next panel. Here are the panelists:

Olufunmilayo (Funmi) Arewa (Associate Professor of Law, Northwestern University School of Law)

“All Work and No Play: Intellectual Property as Serious Business”

Christoph-Beat Graber (Professor of Law, University of Lucerne)

“How Is Creativity Manifested in Traditional Cultural Systems and within International Trade Law?”

Debora J. Halbert (Professor of Political Science, University of Hawaii at Manoa)

“Creativity without Copyright: Anarchist Publishers and their Approaches to Copyright Protection”

with Shubha as Chair and Discussant.

Funmi questioned the valuable asset model of creativity. She argued that it is only recently that great works of art and music are taken to be sacred such that one must not alter or play with them. She called the current model a museum approach in that we have become passive and no longer engage with creations. Christoph tackled the difficult question of owning culture and which expressions can or cannot be traded. Drawing on Niklas Luhmann’s work, Christoph argued that there may be a way to allow groups to determine locally what they wish to do with cultural work and then move the process to the global level to see how to implement and recognize that choice as well as see where harmonization may be necessary. Deb talked about anarchists and copyright. It was fascinating to see how different anarchist publishers saw copyright, displayed copyright notices or not, and the stories about whether authors or publishers were still looking to or asserting copyright in some way.

Lawyering & the Creative Process was the third panel with

William T. Gallagher (Associate Professor of Law, Golden Gate University School of Law)

“’Are They Real Lawyers?’: The Role of Patent Prosecutors in the Patenting (and Inventive?) Process”

Stuart J.H. Graham (Ewing Marion Kauffman Foundation Fellow in Social Science and the Law, University of California, Berkeley – School of Law (Boalt Hall); Assistant Professor of Strategic Management, College of Management, Georgia Institute of Technology) and

Ted M. Sichelman (Ewing Marion Kauffman Foundation Legal Research Fellow, Berkeley Center for Law & Technology)

“The 2008 Kauffman-Berkeley Patent Survey: Why Do Entrepreneurs Patent (And Not)?”

Richard S. Gruner (Professor of Law & Director, Center for Intellectual Property Law, John Marshall Law School)

“The Evolution of Collaborative Innovation: Evidence from the Patent Record”

as panelists. Darian Ibrahim (Assistant Professor, University of Wisconsin Law School) was the Chair and Discussant.

These papers were pushing the way we think about patents. Bill is pursuing questions about patent attorneys as lawyers. His paper goes into questions about enforcement of patents, the perceived advantages of enforcement, and how these attorneys view patents in general. That dovetailed with Stuart and Ted who talked about some great findings based on empirical work regarding the role of patents in entrepreneurial companies. Last, Richard looked at the way patents and coordination in entrepreneurial companies is changing given the increased distance of innovation teams.

Creativity & Construction of Legal Rights was the last panel with

Deven Desai (Associate Professor of Law, Thomas Jefferson School of Law)

“Individual Branding: How the Rise of Individual Creation and Distribution of Cultural Products Confuses the Intellectual Property System”

Steven Hetcher (Professor of Law, Vanderbilt University Law School)

“The Challenge of Monetizing User-Generated Content”

Sean O’Connor (Co-Director, Graduate program in Intellectual Property Law and Policy, Faculty Director, Entrepreneurial Law Clinic, and Associate Professor of Law, University of Washington School of Law)

“The Central Role of Law as a Meta Method in Creativity and Entrepreneurship”

as panelists and Jeffrey M. Lipshaw (Associate Professor of Law, Suffolk University Law School) as Chair and Discussant.

I argued that Benkler’s world of social production has the seeds of its destruction latent within it. In short, as individuals rise, they will seek and already seek to assert old and new property rights. I argue that the law ought not recognize those rights and doing so would in fact undermine some if not many of the benefits that social production offers. Steven’s work takes on Lessig and issues of fair use as they appear in remix and fan fiction. I have to (and want to go deeper) into Steven’s work on norms but I think he is arguing that fan fiction is fair use but we face the problem that one cannot make money from it. Norms play a large role in this dynamic. Last, Sean argued that we should think less about incentives to create artifacts (Mike might say things) and more about the role of methods. The history of invention is more about productive pursuits and serving the commercial and service needs of a society in this view. The problem is that we have slipped into a system more interested in the artifact or thing (I wonder whether this problem is a reification one).

So there it is. I apologize for not nearly doing justice to the talks. They were dense and I am no scribe. Nonetheless, I hope that I have whetted your appetite for the works and encourage you to check out the people and their work.

Last, I again want to thank all involved and especially Shubha for putting together a great conference.

The New Jersey Appellate Division reversed an $876,000 plaintiff’s verdict in a slip-and-fall case where the plaintiff had fallen while looking for pantyhose in aisle five of a supermarket owned by the defendant. . . . [T]he jury foreperson was a New Jersey State Senator, full-time law professor and lawyer who had published an article in the New Jersey Law Journal about his experiences serving as a juror. The defendant contended that the article “disclosed that he improperly influenced the jurors and that there was apparent misunderstanding of the jury charges.”

The court’s opinion is here. The article by the law professor — Robert Martin of Seton Hall Law School (who is also a New Jersey state senator) is in [...]]]> According to Legal Profession Blog:

The New Jersey Appellate Division reversed an $876,000 plaintiff’s verdict in a slip-and-fall case where the plaintiff had fallen while looking for pantyhose in aisle five of a supermarket owned by the defendant. . . . [T]he jury foreperson was a New Jersey State Senator, full-time law professor and lawyer who had published an article in the New Jersey Law Journal about his experiences serving as a juror. The defendant contended that the article “disclosed that he improperly influenced the jurors and that there was apparent misunderstanding of the jury charges.”

The court’s opinion is here. The article by the law professor — Robert Martin of Seton Hall Law School (who is also a New Jersey state senator) is in the New Jersey Law Journal and requires a subscription to access it.

What should one conclude from this case?

The reaction many would have is that it was unwise to put a law professor on the jury. Shouldn’t one expect when a law professor or lawyer is on the jury that he or she will have significant influence? If you put a bunch of people in a airplane cockpit, none of whom know how to fly a plane, along with a pilot, it doesn’t take Einstein to figure out that the people might want to consult with the pilot! As my colleague Jonathan Turley writes in his blog: “Martin’s article is a perfect example why some of us oppose lawyers sitting as jurors. It is a terrible practice that encourages undue influence by a single juror in deliberations.”

But there’s another lesson to be learned from this case. We should have professional juries. I’m increasingly of the opinion that our jury system is a joke. Consider some of the very thoughtful points Professor Martin wrote in his article about his experiences:

I became acutely aware that jurors are not generally permitted to ask questions during trial (except through written request). . . .

Additionally, jurors are usually prohibited from taking notes. . . .

In preparation of our deliberation, the judge gave us detailed instructions, which in this case lasted about an hour. These instructions amounted to a mini-course in tort law, similar in content to what some law students have trouble absorbing over the course of a full semester. Although the judge read from carefully prepared notes, we again were prevented from taking our own notes (but reminded that we must closely follow all of the instructions).

The process which Martin describes (and which indeed is quite common) is ridiculous is so many ways. First, it is ridiculous that juries are basically taught the law after hearing the facts of the case. If one is applying a rule, shouldn’t one know about the rule first in order to determine which facts are relevant and which are not?

Second, it takes law students three years to learn the law — or at least a semester to learn a specific subject like torts — and yet juries are expected to understand the law after just one brief lecture from the judge. Who are we kidding when we think that the jury is really applying the law? Juries probably have little to no idea about what the law is.

Third, many judges disallow note-taking. But in lengthy trials — or even in trials lasting a day or two — how are jurors supposed to remember the details? And in the case Martin describes, the jurors weren’t allowed to take notes about the law when the judge instructed it. I’d like to try an experiment — give a bunch of judges an hour lecture about a specific set of legal rules, not let them take notes, and then see how much they remember. This is difficult even for those with legal training — imagine how hard it must be for those without such training!

Many law professors rail against student-run law reviews, where students select the articles. “How can we let a bunch of amateurs decide which scholarly articles have merit?” so many professors wonder. Professors complain more about this than our legal system, where we have a bunch of amateurs decide cases and apply the law. As Justice Oliver Wendell Holmes once wrote: “[I]f a question of law is pretty clear we [judges] can decide it, as it is our duty to do, if it is difficult it can be decided better by twelve men taken at random from the street.”

At least in civil cases — and perhaps in criminal ones too (this gives me more pause, for the jury’s ability to check the power of the state in criminal cases has significant value in my opinion) — I believe we should have professional juries, with basic knowledge of the law (and perhaps even a full three-year legal education).

In addition to basic knowledge of the law, professional juries should also be trained in the latest empirical evidence that would help them best assess the factual evidence in a case. Jurors should be trained in the studies about the reliability of eyewitness testimony (which isn’t very reliable) so they can weigh it appropriately vis-a-vis other evidence. They should be trained about which cues and aspects of a witness’s demeanor are likely to indicate whether he or she is telling the truth, as currently jurors use their own intuitions in this regard, which may or may not be correct. And so on.

Jurors should be paid a real wage for their services. Currently, we slough off the costs of our legal system on people randomly selected for jury duty.

We’re in the 21st Century, and our legal system uses a method of adjudication that was invented in the Middle Ages. It’s time for a more professional way of resolving legal disputes, one where the decisionmakers are not a bunch of often-unwilling people plucked from the street, forced to upend their lives to resolve the disputes of others, and without the expertise to evaluate the facts and apply the law.