Feedback to SSRN (Beta)
What type of feedback would you like to send?
Abstract: Conventional economic and political theory predicts that the states will underregulate the degradation or destruction of natural resources within their borders when some or all of the resulting adverse effects fall outside their borders, that is, upon out-of-staters. Academic critics of the federalization of environmental law agree with this conventional view at an abstract level, but, in their view, only the physical effects of the destruction of a natural resource on out-of-staters should count as an interstate externality that can justify federal intervention. The federal courts may be moving toward an even narrower conception of what constitutes an environmental externality that can justify federal regulatory intervention - a conception in which the externality must entail interstate market effects in addition to interstate physical effects. This Article argues that a significant set of the interstate effects of natural resource degradation and destruction on the American populace cannot plausibly be classified as either physical or market effects: some, perhaps many, Americans lose some sense of well-being simply by virtue of the loss of the existence of wetlands, waterways, and other natural resources in states where they do not live. Existence values (or more precisely, the desire to prevent the loss of existence values) provide a powerful positive account of how the federal political process, despite concerted opposition by well-organized business interests, has at times come to restrict the degradation of natural spaces that few out-of-state residents are likely to ever visit or otherwise use. Existence values also provide a strong normative account of why such restrictions are, from a societal vantage, presumptively welfare-maximizing. Indeed, as explained in Part III of the Article, federal regulation is more likely to be necessary to maximize welfare in the context of interstate losses in existence value than in the context of interstate physical effects, such as air or water pollution crossing state lines. The principal claim of those who reject the use of existence values as a rationale for federal regulation is that existence values are nonmeasurable and hence unsuitable for consideration in public policy. As explored in Part IV of the Article, this empirical objection is inconsistent with the findings of contingent value (CV) surveys in which respondents have been asked how much they would be willing to pay for the preservation of one or more natural resources. The CV surveys completed to date, although admittedly imperfect as measurement devices, suggest significant values for the preservation of a range of natural resources. More important, the federal political process itself provides a comparative measure of the magnitude of the existence-value benefits of natural preservation (on the one hand) and the magnitude of the competing economic benefits associated with the degradation or destruction of natural settings (on the other). If anything, given the core insights of public choice theory and the structural supports in the federal political process for industries whose economic interests often run counter to natural preservation (e.g., the mining, timber, and oil industries), we should expect the federal political process to understate significantly the comparative magnitude of the existence-value benefits of natural preservation. The current literature also contains a non-empirical objection to existence values as a justification for federal regulation. The essence of this objection is that federal preservation regulation premised on existence value preferences is illegitimate because it violates the principles of respect for private property rights and distributive justice among communities. As explained in Part V of the Article, these principles, at best, support the claim that all sorts of government regulation - and not just federal regulation aimed at preserving natural resources - is illegitimate from a particular (and highly contestable) point of view. The normative defense of existence values and existence-value-driven regulation developed in Parts III-V provides a useful perspective from which to evaluate the current state of Commerce Clause doctrine. Commerce Clause doctrine has never formally recognized existence-value concerns as a basis for federal jurisdiction, and that is unlikely to change. However, certain doctrinal approaches to the Commerce Clause create room for regulation motivated by existence-value concerns, and others, such as the approach arguably endorsed by the majority in SWANCC, do not. If one accepts that federal regulation premised on existence-value concerns is presumptively welfare maximizing, then one must accept that Commerce Clause tests that preclude such regulation carry a substantial social cost. The normative defense of existence-value regulation also has implications for the choice between approaches to standing that facilitate citizen enforcement of regulations premised on existence-value concerns, and approaches, such as that endorsed by the majority in Lujan v. Defenders of Wildlife, that impede such enforcement.
Econonics, law, environmental law, natural resources
Abstract: The federal courts using the common law method of case-by-case adjudication may have institutional advantages over the more political branches, such as perhaps more freedom from interest group capture and more flexibility to tailor decisions to local conditions. Any such advantages, however, are more than offset by the disadvantages of relying on the courts in common resource management in general and in the management of the global atmospheric commons in particular. The courts are best able to serve a useful function resolving climate-related disputes once the political branches have acted by establishing a policy framework and working through the daunting task of allocating property or quasi-property rights in greenhouse gas emissions. In the meantime, states do have a state legislative alternative that is preferable to common law suits, and that federal courts can facilitate without any dramatic innovations in federal preemption or dormant commerce clause doctrine.
Global warming, climate change, nusiance, public nuisance, federalism, environmental law, greenhouse gas emissions, political question
Abstract: The Supreme Court's decision in the Kelo case has been widely criticized, and has ignited a firestorm of reform in the states. Twenty-three state legislatures have passed reform statutes, and nineteen of these statutes have been signed into law. Reform legislation has been introduced in at least 13 other states. This Essay addresses the question of what message is sent by - what is the expressive meaning of - the Kelo-inspired reform movement. My argument is that, in substantial part, this reform movement privileges the stability of middle-class households relative to the stability of poor households, and in so doing, expresses the view that the interests and needs of poor households are relatively unimportant.
Abstract: This Article's normative claim - that a rule allowing subsequent challenges to class action settlements is compelled by our basic intuitions of fairness and justice when class members could not conceivably have agreed to the arrangement had they been present but not known their precise position in the class - builds on the Rawlsian construct of fairness as the product of (hypothetical) decision-making in an "original position," behind a "veil of ignorance," and the economics of human decision-making under conditions of uncertainty. This approach suggests that certain types of settlements in both high-individual-stakes/toxic torts/personal injury class actions and small-individual-stakes/consumer fraud class actions should be subject to subsequent challenge. First, this combined Rawlsian/economics analysis strongly suggests that all class settlements that provide for the possibility that any class members will receive negative relief, as in the Bank Boston litigation, are unfair and should be subject to challenge on adequacy of representation grounds. Second, with regard to high-individual-stakes class actions, the approach also suggests that settlements that create the possibility that some class members will receive no relief always should be subject to subsequent challenges. Third, again in high-individual-stakes class actions, subsequent challenges should be permitted with respect to settlements that provided all class members some relief, but that grossly deviated from a principle of equal payment for equal harms without investing administrative cost savings in the improvement of the position of the most severely-injured such that the most-severely injured receive more than they would have under an equal- compensation-for-equal-injuries formula. Fourth, even in small individual stakes litigation, subsequent challenges should be permitted to settlements that provided for the possibility of providing zero compensation to any class members or that deviated from an equal-compensation-for-equal-injuries approach compensating without thereby reaping significant administrative cost savings that are dedicated to increasing the overall compensation pool for class members. The essence of the Rawlsian approach is a thought experiment regarding the ordering of society as a whole. In the thought experiment, Rawls postulates the presence of human beings under certain conditions - "original position" conditions - and then reflects on what arrangements or rules those individuals would agree to as fair for the distribution of goods and entitlements in the society as a whole. The conditions Rawls sets for his thought experiment - individual decision-making, ignorance on the part of each individual as to their morally irrelevant or contingent characteristics beyond the veil, very high stakes for individual welfare and life prospects for the decision-makers, a generally shared moral sense of the fundamental equality of human beings - readily translate from original position (persons deciding on the rules for social ordering as a whole) to the toxic tort/products liability class action original position, in which class members must choose a distribution regime for compensation for possible current and future cases of disabling or even fatal diseases, conditions, or injuries. Thus, if persons in Rawls' original position adhere to a maximin principle of avoiding worst possible outcomes, and that adherence deserves normative weight, we should expect that class members in toxic tort/products liability cases behind a veil of ignorance will adhere to a maximin approach, and we should accord normative weight to that adherence. The Article does not rely solely on the extension of the Rawlsian original position thought experiment to the class action context, however. One of the predictions of neoclassical economic theory, as well as a basic finding of behavioral/experimental/empirical economics is risk aversion in human decision-making in the absence of an ability to self- or third-party-insure against bad outcomes. Other findings are an aversion to unequal distributions of wealth and other goods absent some objective justification for inequality, and an aversion to prospective losses (as opposed to gains or foregone gains). These well-established findings, in and of themselves, suggest that settlements of the sort at issue in Stephenson and Homeside could not have garnered the agreement of class members had they been able to give or deny their consent. In addition, surveys I conducted of first-year law students demonstrate a strong hostility to settlements that entail the risk that a class member might be left without any relief for severe injuries, and a strong predisposition toward settlements that ensure equal outcomes for equally harmed class members.
Torts, Civil Procedure/Litigation, Law and Economics, Jurisprudence
Abstract: As a purely theoretical matter, we can predict that a flat ban on all exercises of eminent domain will result in some less development in urban areas (poor or not poor) and some more development in exurban or rural areas. We can also predict that a ban on only economic development condemnations (which allows so-called blight or blight removal condemnations to continue as before) will result in some more development in poor urban areas (but not necessarily in urban areas as a whole) and in exurban or rural ones, and less development in suburban areas (at least non-poor suburbs). We can say almost nothing about how much less or how much more. Moreover, even these minimal predictions must be qualified because restrictions on eminent domain may lead localities in fragmented land markets to rely more heavily on alternative means to reduce the costs of land assembly for developers, such as cash and infrastructure subsidies or zoning exceptions, particularly in markets where the status quo ante was imperfect competition among the localities for new development. The qualitative claims about the nature of the development that will be encouraged or discouraged as a result of eminent domain "reforms" lack both theoretical and empirical support. Stated simply, there is no defensible way to categorize as good or bad, economically viable or non-viable, efficient or inefficient, socially beneficial or socially harmful, the development in urban areas that will be lost as a result of a flat ban on eminent domain or (in poor urban areas at least) that will be gained as a result of a ban on economic development condemnations coupled with continued allowance of blight condemnations. One reason this is so is that the two legal tests for the kinds of "public use" that are sufficient for the exercise of eminent domain - the economic development as public use test and blight removal as public use test - do not necessarily select for "good" new development according to any intelligible criteria of goodness. In sum, we are left with a rather unsatisfying situation: a lack of any assurance as to whether there will be any net benefits, in terms of more "good" development and less "bad" development, as a result of either of the two eminent domain reform alternatives currently on the political agenda, namely, a flat ban (the Florida approach) or a ban on only economic development condemnations coupled with continued allowance of blight condemnations (the approach in most reforming states). Given this unsatisfying situation, and assuming we do care about poorer urban areas, we need to ask, we should ask: is there a different kind of eminent domain reform for which we would have more, at least some more, assurance that it will produce more good development and less bad development in those areas? The debate over eminent domain reform needs to be re-framed.
Abstract: The two eminent domain reform alternatives currently on the political agenda are a flat ban on condemnations or a ban on only economic development condemnations coupled with continued allowance of blight condemnations (the approach in most reforming states). Although the possible effects of reform are central to the current debate, scholars have not carefully addressed those effects. With regard to the quantitative effects of reform, this Article uses an accessible model to demonstrates that: (1) a flat ban on all exercises of eminent domain will result in some less development in urban areas (poor or not poor) and some more development in exurban or rural areas; (2) a ban on only economic development condemnations (which allows so-called blight or blight removal condemnations to continue as before) will result in some more development in poor urban areas (but not necessarily in urban areas as a whole) and in exurban or rural ones, and less development in suburban areas (at least non-poor suburbs); and (3) the extent to which alternative means of subsidizing new development (such as tax relief) will offset the loss of eminent domain depends on the level of competition among localities for new development prior to ban or restrictions on the use of eminent domain. We can say less about the quality of the development after eminent domain reforms than we can about the quantity of development after eminent domain reforms, as the qualitative claims about the nature of the development that will be encouraged or discouraged as a result of eminent domain "reforms" lack both theoretical and empirical support. Stated simply, there is no defensible way to categorize as good or bad, economically viable or non-viable, efficient or inefficient, socially beneficial or socially harmful, the development in urban areas that will be lost as a result of a flat ban on eminent domain or (in poor urban areas at least) that will be gained as a result of a ban on economic development condemnations coupled with continued allowance of blight condemnations. Given that, a new approach to the public use component of eminent domain law is needed.
Environmental Law, Property and Land Use, Law and Economics, Constitutional Law
Abstract: This essay sketches a Rawlsian defense of allowing subsequent challenges to class action settlements, as in the Stephenson agent orange case and the Homeside Bank Boston case. My normative claim is that the Rawlsian original position is a helpful way of thinking about what a fair distribution among class members entails that is, we should ask whether a settlement conceivably could have been agreed to by class members standing behind a veil of ignorance as to what their particular position or place within the class would be beyond the veil. Subsequent challenges to settlements should be permitted where no reasonable class member standing behind the veil of ignorance, employing maximum decisionmaking, would have consented to the settlement. I also argue that proposed reforms in the manner by which judges approve class action settlements, while perhaps sensible, will not eliminate the problem of inadequate representation, and that the availability of such subsequent challenges based on inadequacy of representation will not appreciably reduce the settlement rate in class actions or otherwise destroy the class action as a dispute resolution mechanism.
Torts, Litigation, Procedure, Public Law, Law and Economics
Abstract: This Article explores the phenomenon of "exclusionary eminent domain" - the exercise of eminent domain that has the effect of excluding low-income households from an otherwise predominantly or entirely middle-class or wealthy neighborhood or locality, whether or not exclusion itself was the purpose of the condemnation. All condemnations exclude the condemned owner (and his or her tenants, if any) from the condemned property. Exercises of what I am calling "exclusionary eminent domain" are doubly exclusive because the displaced residents are unable to afford new housing in the same neighborhood or locality as their now-condemned, former homes. In exclusionary eminent domain, low-incomes households are excluded not only from their homes but also from their home neighborhood or locality.
Exclusionary eminent domain, as I am using the term, seems to occur in two distinct contexts. In the suburban context, a structure or structures occupied by low-income households are condemned by a predominantly non-low-income locality in the interest of attracting new development that will house or otherwise be geared to middle-class or wealthy people. The threatened condemnations of mobile home parks in suburban New Jersey towns such as Lodi are examples of this type of exclusionary eminent domain. In the urban gentrification mode of exclusionary eminent domain, a large city with a mix of wealthy and poor areas condemns low-income housing in a gentrifying or largely gentrified area, with the result that the displaced low-income residents must move to poorer areas of the city or out of the city. The use of threats of eminent domain to facilitate the massive Atlantic Yards development in north central Brooklyn - a development that will feature seventeen luxury towers to be constructed by Frank Gehry - illustrates this model of exclusionary eminent domain. This Article assesses the case for a new state constitutional law doctrine limiting exclusionary eminent domain, and argues that, on balance, the advantages of such a doctrine may exceed the disadvantages. The particular form of exclusionary eminent domain doctrine I am positing would incorporate two of the features of the most analogous existing doctrine, the state constitutional law doctrine regarding exclusionary zoning. Those features are, first, judicial evaluation of a locality's actions in terms of the metropolitan regional needs for low-income housing and each locality's fair share obligation with respect to those needs, and, second, the creation of a rebuttable presumption of illegality when the locality takes an action that will bring its stock of affordable housing below or further below its fair share obligation. An exclusionary eminent domain doctrine would not absolutely bar condemnation of low-income housing in a locality or neighborhood that otherwise has less than its fair share of such housing, but rather would result in the application of heightened review to such condemnations. The condemning authority would have to provide a more compelling, more-tailored justification for condemnation than rational basis review would require.
An exclusionary eminent domain doctrine would raise the cost to local officials of condemning low-income housing located in middle-class or wealthy neighborhoods or localities, and thereby would make it more likely that those officials would configure new development so as to leave such housing in place. The doctrine also would provide a strong incentive for a locality that wanted to proceed with the condemnation of low-income housing to create substitute low-income housing in the same neighborhood as the development site, as by doing so they would negate the claim that condemnations would drop the locality or neighborhood below its pre-condemnation fair share of low-income housing. In addition, the doctrine would have the effect of increasing the bargaining power of owners of low-income housing owners who want to sell, so that they would receive larger payments than they would have if there were no exclusionary eminent domain doctrine.
Eminent domian, exclusionary zoning, zoning, affordable housing, Mount Laurel, Kelo
Abstract: Secured credit in homes has been divided and over-divided and spun into so many separate interests that economically rational, socially beneficial modifications of loans are impossible. The mortgage story is a new one but the excessive fragmentation of property and the creation of waste and inefficiency is not new. And our legal tradition of state property law has an answer, in the form of an anti-fragmentation principle. Consistent with this principle, federal government trustees should be authorized to review mortgages and, where modification would yield greater total return than foreclosure, modify the loans. Blind trustee review, moreover, can be achieved without formal condemnations of property interests or the creation of government liability for regulatory takings.
mortgages, housing, takings
Abstract: This Article represents an attempt to fill a gap in the existing environmental law and policy literature by exploring the interplay between the extent to which, and the conditions under which, polluting firms are allowed to bank excess pollution credits and the strength of the incentives for polluting firms to invest in the development of new pollution reduction and control technologies. The central argument in the Article is this: permitting the banking of pollution credits has both a pro-innovation and anti-innovation incentive effect, and the anti-innovation effect for each firm is a function both of how many credits that firm has in the bank and of how many credits it knows that its competitors have in their banks. Although my analysis does not point to any particular rule regarding banking, it does provide some support for limits on the banking of credits. The intuition behind the analysis is simple: once firms have banked pollution credits, they are in the position of both a prospective buyer and a prospective seller of pollution credits. As prospective buyers of credits, firms have an incentive to further the development of pollution reduction and control technology that will (in addition to other things) reduce the prevailing market price for credits. As prospective sellers of pollution credits, by contrast, firms have an incentive to deter, or at least not further, the development of pollution reduction and control technology that will reduce the prevailing price for credits.
Environmental Law and Policy, Law and Economics, Ad Law
Abstract: This Article sets forth a normative argument for changes in federal preemption and federal ripeness doctrine, using the California greenhouse regulations as the principal example. Cases in which the courts find that federal law preempts state law raise questions not only as to whether state sovereignty as a distinct value has received its due but also whether enough attention was paid to the democratic preferences, the democratic weight, that resulted in one or more state opting for an alternative to federal law. The more and bigger the states there are that adopt a non-federal standard, the greater is that democratic weight, and the more the courts should hesitate before finding federal preemption in otherwise close cases - cases where there is a great deal of statutory ambiguity and uncertainty as to Congressional intent. To facilitate this democratic-weight approach, and to bring more consistency to the treatment of states and state institutions in the federal courts, the federal courts should adopt a stricter ripeness requirement for federal preemption cases than they currently employ. A stricter ripeness requirement also would help Congress and the federal Executive respond to state adoptions of non-federal standards, and in that sense would help make federal law more accurately reflect national sentiments. Finally, in future legislation, Congress should facilitate state coordination through greater use of the single-state-alternative approach employed in the mobile source emissions portion of the federal Clean Air Act. The approach advocated in this Article, if adopted, could make the difference in the outcome of the greenhouse gas emission preemption litigation now ongoing in California, Rhode Island and Vermont. On the substantive merits of the preemption claims, the fact that many states legislatures, reflecting electorates that account for a large portion of the nation, have opted for the greenhouse gas emission standards that in effect would require improved fuel economy could be a deciding factor given that the relevant Congressional intent concerning preemption, however conceived, is hard to discern. There is no easy answer to the intent question given that Congress explicitly endorsed the right of California to adopt stricter air standards than the federal standards (which arguably is what California and the other states have done) and Congress explicitly prohibited states from adopting stricter fuel economy standards than the federal standards (which arguably is what California and the other states have done).
Environmental Law and Policy, Constitutional Law - Federalism, Civil Procedure
Abstract: Two kinds of domestic regulation aimed at protecting endangered species and their habitat have proven very controversial. In one kind of regulation, a national legislature (in the United States, Congress) or agency provides regulatory protection for a species located in one distinct part of the country, at the behest of people who live in other parts of the country. Federal protection of the spotted owl and its old-growth habitat in the Pacific Northwest is arguably an example of this sort of regulation. In a second kind of regulation, a national legislature or an agency attempts to protect a species in another country by enacting trade restrictions designed to compel actors in the other country to help to preserve the species in question. U.S. trade restrictions designed to save dolphins off the coast of Mexico and turtles in the waters off Malaysia are arguably an example of this kind of regulation. In a loose sense, both kinds of regulation are "extraterritorial." With the first, spotted-owl-type category, the regulation is extraterritorial in the sense that its political proponents/enactors in large measure live outside the states, the territories, if you will, where the species to be protected live and the direct economic impact of the regulation will be felt. With the second, tuna-dolphin kind of regulation, the regulation is extraterritorial in the sense that it is directed toward species that live outside not merely some part of the nation but outside the nation altogether. The extraterritorial aspects of these two types of regulation may help account for the controversy they engender: some people in Washington or Oregon seem to be particularly peeved by federal spotted-owl protections because New Yorkers and Californians, in effect, made such protections a political reality. We know without doubt that one of the sources of complaints about restrictions on the import of dolphin-unsafe tuna into the United States was that the United States simply had no business meddling in how fishermen in other countries, in other nations' waters, conduct their business. But extraterritorial protection of endangered species and their habitat is controversial not simply because it seems like cross-border meddling, but also because of the values that motivate the protection efforts. By and large, the destruction of a species and its habitat does not threaten discernible economic or health harm to people who live far away, in different states or countries. If it did, the meddling might not seem to be, in fact, meddling. Most extraterritorial regulatory protection is driven by the option value of possible uses in the future of bio-diversity in general and particular species and habitats, and, even more, by intrinsic valuation of the continued existence of species and habitats as an end in itself. The skepticism about extraterritorial, species-oriented regulation likely reflects, in part, skepticism about option and existence values as a predicate for government action. To date, most of the legal academics who have addressed regulation aimed at protection of species and habitats within the United States and regulation aimed at the protection of species outside the United States have not focused on the common question posed by these two types of regulation - namely, when should people in one place (be it state(s) or nation(s)) be able to enact and implement regulations to persuade or compel people in other places (be it state(s) or nation(s)) not to harm species or habitats located wholly in those other places? What are the affirmative rationales for such regulations, and when are those rationales more or less robust? What are the potential dangers or costs of such regulations and, again, when are those costs particularly worthy of attention? These inquiries necessarily focus us on two bodies of law that are not often considered in tandem: American constitutional law and especially the law regarding Congress' enumerated powers, and the General Agreement on Tariffs and Trade (GATT) as implemented by the World Trade Organization (WTO). As detailed in Part One, the U.S. Constitution and GATT are both ambiguous regarding the legitimacy of extraterritorial species-oriented regulation. The Constitution unquestionably permits Congress to protect species and habitat on federal land, but the text of the Commerce Clause is a very problematic basis on which to justify species regulation on non-federal land. At the same time, the very substantial jurisprudence built up around the Commerce Clause in the last seventy years, as well as the dominant conception of the United States as involving a single national community on many levels, supports federal regulation on non-federal land. In the case of GATT, the situation is arguably the reverse. The text of Article XX of GATT provides some textual basis for extraterritorial species-oriented regulation in the form of domestic trade restrictions. But the dominant conception of the WTO as a limited form of international cooperation singularly focused on curbing the threat of protectionism and trade wars, a conception some WTO appellate panel decisions openly embrace, works against a reading of GATT that would permit species-oriented trade restrictions. In sum, the legality of species-oriented regulation under the United States Constitution and under GATT is contestable. Where, as here, legal arguments are indeterminate, "policy" considerations are particularly important because legal decisionmakers will enjoy broad discretion to shape outcomes. Moreover, at least in the case of GATT, amendment to the basic legal documents would seem to be a realistic possibility. The remainder of the Article, Parts II-V, thus turns from the descriptive to the normative in asking what kinds of extraterritorial species-oriented regulation should be permissible. To anticipate the conclusion, I argue that extraterritorial legislation of the first, spotted-owl type is presumptively socially desirable and presumptively should be upheld as lawful. But extraterritorial legislation of the second, tuna-dolphin sort poses a substantial risk of cost-benefit irrationality - of the imposition of costs disproportionate to the garnered benefits. As a consequence, WTO decisionmakers should construe Article XX as permitting them to engage in something that approximates cost-benefit review. Such a review itself has disadvantages, but would appear to be the second best alternative in a world without first best solutions. Part II of the Article develops the affirmative case for extraterritorial species-oriented regulation. This case builds on a recognition of the significance of interstate losses in option and existence value that may result from species and habitat destruction, and the lack of reliability of contractual bargaining or cross-boundary migration as a means of avoiding these losses. Part III addresses the principal critique of extraterritorial species-oriented regulation - that it is a pretext for socially-destructive, illicit economic protectionism. I argue that pretext concerns are overblown. All regulation raises the possibility of pretextual motivation, and that possibility is no more troublesome, indeed may be less troublesome, in the context of species-oriented regulation than in many other contexts. As discussed in Part IV, the principal concern regarding extraterritorial species-oriented regulation should not be pretext, but rather that the costs such regulation imposes have not been adequately considered. In the United States, the federal political process operates to accord full weight - or even more - to the costs of regulation aimed at preserving species and their habitat within the United States. But the federal political process in the United States (as well as national political processes elsewhere) does not ensure meaningful consideration of the costs borne by foreign nationals as a result of regulation aimed at the preservation of species in foreign lands and waters. Hence, there is a need for some sort of cost-benefit review ex post, after the regulation aimed at protecting species abroad has been adopted.
International Trade, administrative, constitutionational, environtmental
Abstract: The precautionary principle is, in some sense, an easy target for scholarly criticism: it lacks precision and for that reason invites charges of hypocrisy and manipulation on the part of those who invoke it on behalf of their policy positions. But the principle has proved to be a mainstay of the discourse of environmental protection, especially in those fora where environmental protection is taken most seriously. My article's principal claim is that this is neither a meaningless nor (as in Professors Sunstein's and Cross' accounts) an unfortunate phenomenon. Environmental policy choices often implicate cognitive biases in favor of the avoidance of sure, immediate losses over the avoidance of unsure, non-immediate ones, and the precautionary principle may play an important role in mitigating or even fully correcting these cognitive biases. Serious consideration of the role of the precautionary principle as a bias-correcting device also may shed light on other previously-ignored issues, including: the translation of cognitive biases into politics, the potential for full-scale risk-risk analysis to intensify cognitive biases in the arena of environmental law and policy, and the promise of contingent value methodology as a means to test relative valuations of non-market goods, as opposed to the absolute measure of such goods in money terms.
Abstract: A firmly entrenched principle in our legal system is that the severity of punishment for a given offense should depend in part on the offense history of the offender. Repeat offenders receive more severe punishment than first-time offenders; repeat offenders with many previous offenses receive more severe punishment than repeat offenders with few previous offenses. In an extreme application of this principle, some states now rachet up penalties for criminal offenders in such a way that the third offense triggers permanent imprisonment. While the three-strikes-and-you're-out approach is controversial, the general principle of escalating penalties based on offense history is widely accepted--indeed, it is so widely accepted that it strikes most people as simple "common sense." To a very substantial extent, the principle is embedded in formal federal, state, and administrative codes and in the enforcement norms of prosecutors and government officials at all levels of government. For economists, however, the principle of escalating penalties based on offense history is extremely puzzling. In the standard economic model, the purpose of penalties is to deter conduct that creates greater social costs than benefits; where the system of penalties is calibrated to produce "optimal deterrence," offenses that produce net social costs will be deterred while offenses that produce net social benefits will go undeterred. Within this paradigm, the key factor in assessing the optimal penalty for a given offense is the social harm that will result from the offense. But the social harm from a given offense would seem to have nothing to do with the offense history of the offender; a theft causes its victim as much pain and inconvenience when the thief is a first-time offender as when he or she has a long history of such offenses. Thus, standard economic analysis would seem to suggest that, contrary to actual practice, penalties should not escalate based on offense history. Presented with this gap between theory and practice, a number of law and economics scholars have developed subtle analyses that purport to show that, at least under certain circumstances, the principle of escalating penalties based on offense history is consistent with the goal of inducing optimal deterrence. One central claim of this Article is that the economic model of optimal deterrence cannot explain escalating penalties based on offense history and that, in fact, optimal deterrence analysis actually would support declining penalties based on offense history. The gap between economic theory and actual practice is thus even larger than the existing literature recognizes. This gap strongly suggests that we must look outside the conventional construct of optimal deterrence to understand the wide acceptance of the principle of escalating penalties based on offense history. Part II of the Article reviews the existing literature that attempts to reconcile the goal of optimal deterrence with the principle of escalating penalties based on offense history. The critique of this literature is based, in part, on the fact that this literature either employs assumptions that are themselves inconsistent with economic analysis or it employs assumptions that have limited empirical foundation. At best, a conventional economic account can explain the general practice of escalating penalties only for offenses of a sort that invariably entail greater social costs than benefits (e.g., murder). Part III builds on a manifestly important, but previously ignored, empirical reality: when an individual commits an offense and is caught and punished, the process by which she is caught and punished often generates information for public enforcement officials that would facilitate their catching and punishing the individual in the future were she to continue to engage in prohibited conduct. In other words, holding all other variables constant, people with "records" have a higher probability of having their offenses detected than people without records. This fact suggests that, in order to achieve the goal of optimal deterrence, our legal system should impose declining penalties based on offense history (rather than the opposite, as our system actually does). Part IV provides additional reasons why optimal deterrence supports declining penalties based on offense history. Part V considers whether behavioral economics and cognitive psychology can help reconcile the theory of optimal deterrence and the principle of escalating penalties based on offense history. The opposite turns out to be true. The literature regarding salience bias--the bias toward exclusive or over-consideration of personal, recent, vivid experience--suggests that individuals who have recently been detected and punished for a violation should face reduced penalties because their recent detection and punishment experience will bolster their fears of future detection and punishment. The behavioral economics literature also suggests that individuals will be over-optimistic about their chances of avoiding detection of wrongdoing until they are actually caught. This analysis suggests, once again, that, in order to achieve optimal deterrence, our legal system should provide for less severe penalties for second-time offenders than for first-time offenders instead of, as it currently does, reserving the least severe penalties for the latter group. Finally, Part VI takes up the question of what does drive the pervasive practice of escalating penalties based on offense history. And here I offer an admittedly speculative theory: the escalation of penalties for repeat offenses is necessary to maintain the internalization of the social norm that formally prohibited conduct is wrongful, and this internalization, in turn, greatly facilitates broad-based compliance with the positive law. If penalty escalation based on offense history is necessary for such norm internalization, and such internalization is by far the cheapest way of controlling generally harmful conduct, penalty escalation may be considered a desirable substitute for additional expenditures of public enforcement resources.
Abstract: Monetary penalties have long been the standard form of penalty in the public enforcement of environmental regulation. In recent years, however, federal and state regulators have departed from this tradition and relied heavily upon Supplemental Environmental Projects (SEPs) in settling enforcement actions. In SEP ettlements, the government permits an entity that has violated pollution control statutes to undertake some environmental "good work" in lieu of a monetary penalty. This Article attempts to move the SEP debate beyond the question of statutory authority to the question of how SEP settlements may affect the behavioral incentives of regulators and regulated entities. The central argument of the Article is that the addition of SEP programs to an enforcement regime may change not merely the form of penalties in the regime but also the severity of penalties. For reasons explored in the Article, SEP programs may operate to lower the cost to regulated entities of violating environmental regulations. Consequently, SEP programs may result in underdeterrence of regulatory violations where there previously was none and worsen underdeterrence where there previously was some. The Article also responds to some possible objections to this deterrence analysis. These include the objection that SEP programs may not reduce compliance levels because they invigorate enforcement bureaucracies and foster cooperative relation ships between regulators and regulated entities. The Article also considers the objection that, even if SEP settlements compromise deterrence objectives, they are justified because they result in environmental improvements that otherwise would not have occurred. The Article concludes that SEP programs are an unattractive vehicle to promote environmental good works, at least as compared to a government grant program in which interested companies would compete for government funds.
Abstract: This article argues that a number of recent federal and state regulatory initiatives (HCPs, Project XL, Brownfields, SEPs) reflect a new contractarian paradigm in environmental regulation, the defining characteristics of which are that (1) regulatory requirements are the result of formal negotiation and assent, (2) the requirements are site-specific, and (3) the default for the requirements is existing or threatened command-and-control regulation. The article explores the possible implications of the shift to contractual regulation for judicial review of agency action: notably, courts understandably might analyze contractual regulation from the prism of "private" contract law instead of "public" administrative law, and that change in analytic prism might result in judicial interpretations of regulations that more consistently favor the interests of regulated entities. The article then explores what measures might be taken to help ensure that some of the "surplus" associated with contractarian reforms results in environmental improvements (in addition to compliance costs savings) and to ensure that a regime of contractarian regulation does not fall prey to the kind of entrenchment that critics claim is characteristic of command-and-control regulation. An important and unresolved empirical question is whether some of the possible measures to secure meaningful participation of well-informed environmental advocates in contractarian reform experiments would consume so much of the reform surplus so as to be, from an aggregate social welfare perspective, not worth the effort.
Abstract: This paper considers the question of when courts should enforce contracts between government regulators and regulated entities regarding the scope and content of future regulations. The paper focuses on the contracts that bank regulators supposedly made with thrifts (and that resulted in the Winstar decision in 1996 by the Supreme Court), habitat conservation plans, and the proposed tobacco settlement that Congress came close to ratifying. We argue that the Court in Winstar fundamentally erred in eviscerating certain special procedural safeguards that the courts previously had imposed upon government dealmaking regarding future regulation. We argue that these procedural safeguards - notably, the unmistakeability requirement that government commitments be stated explicitly and the express delegation requirement that administrative agencies possessed express legislative authorization for their dealmaking - served the desirable end of deterring the formation of regulatory contracts that reflected interest group capture (the capture model of regulatory contracts) or that reflected the desire of politicians and competing interest groups to avoid the downside risks entailed in open public debate regarding important issues of public policy (the compromise model of regulatory contracts). We also argue that, even where the pre-Winstar and other procedural safeguards we propose have been satisfied, a strong normative argument exists for limiting the courts' enforcement of contracts regarding the scope and content of future regulation.
© 2009 Social Science Electronic Publishing, Inc. All Rights Reserved. FAQ Terms of Use Privacy Policy Copyright This page was served by apollo6 in 0.187 seconds.