Strategic Plaintiffs and Ideological Judges in Telecommunications Litigation

Abstract

This paper examines the effect of judicial ideology on the selection and outcome of telecommunications regulatory cases. Using a dataset on Federal Communications Commission orders and trials from 1990 to 1995, this paper shows that changes in the make-up of the bench of the D.C. Circuit Court of Appeals affects not only who wins the cases, but also the cases selected for litigation. Firms are more likely to bring cases when the agency decisions are ideologically distant from the bench than when the two actors are ideologically close. Randomly selected judges vote ideologically as the firms' actions predict the will, with Republicans judges overturning Democratic agency decisions and vice versa. The effect of judicial ideology on case selection is larger than the effect of judicial ideology on case outcomes. Finally, the paper provides initial evidence that regulatory uncertainty may lead to more litigation.

Keywords: Litigation, Telecommunications, Regulation

JEL Classification: K32, K41