The Fact-Law Distinction: Strategic Factfinding and Lawmaking in a Judicial Hierarchy

Abstract

A fundamental but understudied procedural institution of American law is that appellate courts defer more to trial courts' findings of fact than to their conclusions of law. I formally model this procedural institution, showing how trial courts use factfinding to achieve their preferred outcome and how appellate courts craft rules in anticipation of trial courts' strategic factfinding. Trial courts do not always report facts truthfully. Appellate courts do not commit to consistent rules, but consistent rules may emerge in equilibrium, creating a misleading appearance of judicial commitment to legal consistency. The model shows that preference divergence between trial and appellate courts has a nonmonotonic effect on factfinding. In addition, fact deference can explain suboptimal rulemaking and reversals even when there is no uncertainty about the likelihood of review or the reviewing court's ideal rule. Finally, the model is useful in understanding why the institution of fact deference persists.

Keywords: clear error, factfinding, procedure, judicial hierarchy, judicial politics, formal models of judicial politics, formal models of procedure

JEL Classification: K40, K41, D02