Articles

Empirical scholars typically model the judicial hierarchy in terms of a principal-agent relationship in which the Supreme Court, the principal, sets policy and the lower federal courts, as agents, must faithfully implement that policy. The law is a signal—the means by which the Court communicates its preferences. This Article argues instead for recognizing the law as an independent normative force. Empirical scholars fail to take seriously the role of law because they reject as implausible formalistic accounts of its operation. This Article advances a more nuanced account of how law shapes the decisionmaking environment of the lower federal courts, one that focuses on the presence of discretion. It explores how different types of discretion afford distinct types of power over lawmaking and case outcomes, and how that discretionary power is allocated between district and appellate courts. Paying attention to discretion suggests features of the judicial hierarchy that are commonly overlooked in principal-agent models. For example, judges’ goals, and therefore their strategies, will vary depending upon whether they seek to influence law development or merely to shape case outcomes. The Article also questions the normative assumption, implicit in principal-agent models, that lower federal courts should decide cases in accordance with the policy preferences of the Supreme Court. Because judges inevitably have discretion when applying the law, a norm of compliance with superior court precedent does not necessarily require lower courts to follow the policy preferences of the Supreme Court. The reasons judicial discretion exists, such as allocating power within the judicial hierarchy, may argue against such a centralization of power in the Supreme Court.

In response to the broad scope of the Enron-era frauds, the federal government has adopted novel strategies to investigate and prosecute corporate crimes. This Article examines the use of stringent cooperation requirements and deferred prosecution agreements, pursuant to which corporate internal investigations have become extensions of government enforcement efforts. At the same time, liability has shifted markedly to the employee level: Over one thousand individuals have been indicted and convicted since the July 2002 creation of the Corporate Fraud Task Force, while few corporations have been charged. The convergence of corporate cooperation doctrine with the focus on individual targets results in significant unfairness for employees who are compelled to incriminate themselves in the context of internal investigations that are directed by the government. Because of the awkward partnering of public governmental investigations with private corporate compliance efforts, that normative burden on employees may not be offset by enforcement benefits. This Article suggests that the government’s application of a civil regulatory model to criminal cases creates distortions because individual liberty rather than a financial sanction is at stake, because prosecutors do not engage in negotiated governance, and because judicial oversight at the investigative stage is minimal. This Article also addresses the constitutional implications of outsourcing corporate criminal investigations and argues that employees interviewed by internal investigators pursuant to the terms of a pending deferred prosecution agreement should enjoy immunity analogous to the Garrity shield that protects public employees. Several strands of Fifth Amendment theory are consistent with the argument that economic pressure, such as the threat of job loss, can rise to the level of constitutionally significant coercion. When that pressure is brought to bear pursuant to a deferred prosecution agreement, it is delegated coercion, but may be attributed to the government as state action.

This Article explores the relationship between the First Amendment and criminal procedure. These two domains of constitutional law have long existed as separate worlds, rarely interacting with each other despite the fact that many instances of government information gathering can implicate First Amendment freedoms of speech, association, and religion. The Fourth and Fifth Amendments used to provide considerable protection for First Amendment interests, as in the famous 1886 case Boyd v. United States, in which the Supreme Court held that the government was prohibited from seizing a person’s private papers. Over time, however, Fourth and Fifth Amendment protection has shifted, and countless searches and seizures involving people’s private papers, the books they read, the websites they surf, and the pen names they use when writing anonymously now fall completely outside the protection of constitutional criminal procedure. Professor Solove argues that the First Amendment should protect against government information gathering that implicates First Amendment interests. He contends that there are doctrinal, historical, and normative justifications for developing what he calls “First Amendment criminal procedure.” Solove sets forth an approach for determining when certain instances of government information gathering fall within the regulatory domain of the First Amendment and what level of protection the First Amendment should provide.

Lawyers and other commentators often remark that American courts, and American juries in particular, are prejudiced against large corporate entities. Existing empirical research attempting to confirm this suspicion is contradictory and suffers from a number of shortcomings. In this Article, Judge Moore reexamines the issue by reporting the results of research on an original dataset of over four thousand patent cases and more than one million patents. The results indicate that individuals and corporations are treated differently in jury trials of patent property rights. In jury trials of patent cases between corporations and individuals, individ-uals won 74% of the time, with corporations winning in the remaining 26% of cases. Corporations and individuals won at nearly equal rates in judge trials. Marshaling a range of other evidence, Judge Moore explains that these results are likely to understate the degree of bias.

Moreover, analysis of patent cases permits the exploration of a related phenomenon—the heroic iconization of the American inventor. Just as the injured tort victim is viewed sympathetically, the American inventor is idealized for her ingenuity, productivity, and creativity. The individual inventor puts a face on the corporate entity, humanizing or personalizing it. Hence, even corporation-versus-corporation litigation has an individual component and therefore provides an opportunity for bias to impact decisionmaking.

How easily should courts infer that federal statutes preempt state law? An ongoing debate exists on the question in Congress and among scholars and judges. One side calls for judges to protect federalism by adopting a rule of statutory construction that would bar preemption absent a clear statement of preemptive intent. Opponents argue against such a “clear statement” rule by arguing that state control over preemptable topics is often presumptively inefficient, because common law juries lack expertise and because states are prone to imposing external costs on their neighbors.

This Article sidesteps these debates over preemption and instead argues that, quite apart from whether state law is itself efficient, an anti-preemption rule of statutory construction has benefits for the national lawmaking process. Because of the size and heterogeneity of the population that it governs, Congress has institutional tendencies to avoid politically sensitive issues, deferring them to bureaucratic resolution and instead concentrating on constituency service. Nonfederal politicians can disrupt this tendency to ignore or suppress political controversy by enacting state laws that regulate business interests, thus provoking those interests to seek federal legislation that will preempt the state legislation. In effect, state politicians place issues on Congress’s agenda by enacting state legislation. Because business groups tend to have more consistent incentives to seek preemption than anti-preemption interests have to oppose preemption, controversial regulatory issues are more likely to end up on Congress’s agenda if business groups bear the burden of seeking preemption. Moreover, the interests opposing preemption tend to use publicity rather than internal congressional procedures to promote their ends. Therefore, by adopting an anti-preemption rule of construction, the courts would tend to promote a more highly visible, vigorous style of public debate in Congress.

Modern constitutional doctrine is full of restrictions on the reasons for which legislatures can enact certain kinds of statutes. Modern American courts, moreover, stand ready to enforce those restrictions by considering a broad array of sources about the hidden purposes behind challenged statutes. Yet for most of our history, courts shied away from those inquiries—not because state and federal constitutions were thought to impose no purpose-based restrictions on legislative power, but because such restrictions were not thought to lend themselves to much judicial enforcement. This Article calls attention to bygone norms of judicial review, which often prevented courts from investigating the motivations behind statutes even when the statutes’ constitutionality depended upon those motivations. The Article proceeds to describe changes over time in the practice of judicial review. The history that emerges sheds light on myriad subjects, including the proper interpretation of various seminal precedents, the source of some of the apparent inconsistency in doctrines that implicate purpose-based restrictions on legislative power, and the ways in which uncodified aspects of judicial practice can affect the glosses that courts put on the Constitution’s text.

There is a fundamental divide among theories of contract law between those that picture contract as a power and those that picture it as a duty. On the power-conferring picture, contracting is a sort of legislative act in which persons determine what law will apply to their transaction. On the duty-imposing picture, contract law places duties on persons entering into agreements for consideration, whether they want them or not. Until now, very little attention has been paid to the problem of how to tell whether a given rule is power conferring or duty imposing—a question that should lie at the center of contract theory.

This Article argues that legal powers have two characteristic features. First, there is an expectation that actors will satisfy the rules with the purpose of achieving the associated legal consequences. Second, the legal rules are designed to facilitate such uses. A law might exhibit these features in either of two ways, which define two types of legal powers. Many laws that create legal powers employ conditions of legal validity, such as legal formalities, designed to guarantee the actor’s legal purpose. The presence of such validity conditions is strong evidence that the law’s sole function is to create a legal power, and I suggest reserving the term “power conferring” for such laws. Other laws anticipate and enable their purposive use without conditioning an act’s legal consequences on the actor’s legal purpose. The structure of such laws suggests that they function both to create powers and to impose duties. I coin the term “compound rule” for laws that satisfy this description and argue that the contract law we have is a compound rule. The dual function of compound rules provides empirical support for pluralist justifications of contract law. An example of such a theory can be found in Joseph Raz’s comments on the relationship between contract law and voluntary obligations.

A party in breach of contract cannot sue the victim of breach to recover what would have been the victim’s loss on the contract. The doctrinal rationale is simple: A violator should not benefit from his violation. This rationale does not, however, provide an economic justification for the rule. Indeed, efficient breach theory is founded on the proposition that a breach of contract need not be met with reproach. Yet the prospect of recovery by the party in breach—that is, the prospect of negative damages—has received scant attention in the contracts literature. Close analysis reveals potential costs to disallowance of negative damages, particularly where a party with private information about the benefits of termination also has an incentive to continue under the contract. These costs can arise both ex post, at the time of a performance-or-termination decision, and ex ante, in anticipation of that decision. Nevertheless, allowance of negative damages could impose its own costs, where background information would create an incentive to repudiate a contract before either party could gather more information, for example. Ex ante contractual provisions, such as liquidated-damages or specific-performance clauses, permit parties some latitude to balance the costs of disallowance and allowance of negative damages, albeit imperfectly. Common law limitations on the mitigation duty may be seen as a mechanism to approach this balance in the absence of an explicit con- tractual solution.

Overbreadth in criminal liability rules, especially in federal law, is abundant and much lamented. Overbreadth is avoidable if it results from normative mistakes about how much conduct to criminalize or from insufficient care to limit open texture in statutes. Social planners cannot so easily avoid overbreadth if they cannot reach behaviors for which criminalization is well justified without also reaching behaviors for which it is not. This mismatch problem is acute if persons engaging in properly criminalized behaviors deliberately alter their conduct to avoid punishment and have resources to devote to avoidance efforts. In response to such efforts, legal actors are apt to expand liability rules further, feeding a cycle of evasion and overbreadth that characterizes important areas of contemporary criminal law. Lawmakers cannot purge the resulting overbreadth from liability rules without producing underbreadth, at significant cost to regulatory objectives. I conclude that, in some areas of expanding substantive criminal law, answers to “overcriminalization” therefore lie not in reducing the scope of conduct rules but in greater reliance on mens rea doctrines, redesign of enforcement institutions, and modification of sentencing practices.

This Article uses recent developments in the enforcement of arbitration agreements to illustrate one way in which strategic dynamics can drive doctrinal change. In a fairly short period of time, arbitration has grown from a method of resolving disputes between sophisticated business entities into a phenomenon that pervades the contemporary economy. The United States Supreme Court has encouraged this transformation through expansive interpretations of the Federal Arbitration Act. But not all courts have embraced arbitration so fervently, and therefore case law in this area is marked by tension and conflict. The thesis of this Article is that we can better understand developments in arbitration doctrine by viewing the case law as the product of an ongoing strategic interaction between courts with differing preferences regarding the spread of arbitration. As the Supreme Court has shut off most other means of resisting arbitration, the state law doctrine of unconscionability has in the last several years become a surprisingly attractive and successful tool for striking down arbitration agreements. The nature of unconscionability analysis is that it is flexible, which provides opportunities for courts skeptical of arbitration to use the doctrine to evade the Supreme Court’s pro-arbitration directives while simultaneously insulating their rulings from Supreme Court review. Sophisticated resistance to arbitration is just one side of the story, however. The approach employed in this Article examines the judicial system as a whole, including the ways pro-arbitration courts respond, sometimes indirectly, to what they perceive as manipulation of unconscionability. The suspicion that some courts are disfavoring arbitration drives pro-arbitration courts to change their strategies, such as by establishing new doctrine that facilitates monitoring and shifts decisionmaking authority. This strategic framework can help us make sense of otherwise puzzling trends in arbitration doctrine and can help us predict what moves will be next. Although the specific subject matter is arbitration, this analysis is also aimed at those interested in more general problems of judicial federalism.