The University of Chicago Law School Faculty Blog

Christopher Serkin on Existing Uses and the Limits of Land Use Regulations

Over at the Legal Workshop, the NYU Law Review has posted a piece by visiting professor Christopher Serkin, entitled "Existing Uses and the Limits of Land Use Regulations." An excerpt is below, and you can read the entire article here.

Existing uses occupy a special place in property and land use law.  A use, once established, is imbued with an expectation that it may continue to exist, even in the face of regulatory change.  For example, once built, a building becomes all but immune from subsequently enacted zoning rules.  As much as this comports with strong intuitions, there is something peculiar about the law’s special solicitude for existing uses.  If a developer purchases undeveloped property, planning to build a new condominium, the government has broad powers to downzone or otherwise restrict development on the site.  But once the developer has built the condos—in fact, once the developer has done enough to vest her development rights—the entire legal landscape changes.  Instead of a nuanced inquiry into the government’s interference with the developer’s investment-backed expectations, the existing condos suddenly receive near-absolute protection.

This raises important questions:  To what extent does current land use and property law protect existing uses?  To what extent does the Constitution demand this level of protection?  Are there normative justifications for protecting existing uses?  The answers turn out to be surprising.

Courts have developed a variety of doctrines that assume categorical protection for existing uses.  In fact, however, current constitutional rules do not compel it.  Moreover, there are no particularly good reasons to treat the existence of a use as the boundary line between property that can and cannot be regulated.  A more sensible approach to existing uses—and one that the Constitution in fact permits—is to treat them in the same way as prospective future uses.  There is no persuasive reason to afford greater legal protection to an existing decrepit shack in the woods than to a developer’s reasonable but not yet realized plans for the future.

Audio: Leiter, Nussbaum, and the Top 10 Most Pressing Philosophical Issues for the 21st Century

Philosophy Talk, a weekly, one-hour radio series, recently celebrated their 200th episode with a discussion of the "Top 10 most pressing philosophical issues for the 21st century." The discussion included Chicago's own Brian Leiter and Martha Nussbaum. Listen to the show here.

Epstein on the GM and Chrysler Bankruptcies

Over at the website of The Freeman, published by the Foundation for Economic Education, Richard Epstein has published an article entitled "Political Bankruptcies: How Chrysler and GM Have Changed the Rules of the Game." Below is an excerpt:

The topic of corporate bankruptcy law scarcely titillates the imagination of ordinary citizens, even those with a deep interest in constitutional and public affairs. Harried people treat bankruptcy almost dismissively as a useful way of winding up firms that cannot keep their financial heads above water. In practice they sense rightly that the corporate bankruptcy system cleanses the economy of weak players by their liquidation, reorganization, or sale, hopefully to allow their assets to be released to more productive uses. Explaining how bankruptcy works isn’t a fit subject for polite company.

Those perceptions have changed now that the Chrysler and GM bankruptcies have set a new standard for the fast resolution of some complex if dubious transactions. So troublesome questions arise: Did these transactions comply with the rule of law? Were the property rights of the secured creditors fully protected in the expedited proceedings? Will the process bring confidence to the credit markets? No, no, and no again. Those three “nos” come as no surprise. The basic classical liberal position is right to insist that the government cannot sensibly occupy the roles of market participant and market regulator simultaneously. All else is detail.

You can read the rest of the article here.

Student Blogger - Fall WIP: Daniel Chen and the Effect of Sexual Harassment Law on Gender Inequality

Scholars, particularly economists, are of two minds when it comes to employment regulations aimed at protecting vulnerable groups. The goal behind these laws, of course, is to equalize the status of groups seen as vulnerable to economic discrimination, such as women or the disabled. One prominent position amongst economists, however, is that these policies often are counterproductive, raising the cost of employing the relevant groups and thus imposing unneeded costs upon them. In a new paper with Jasmin Sethi, Kauffman Fellow Daniel Chen finds evidence that sexual harassment law does help reduce gender inequality in the workforce.

It's useful first to explore the mechanics of why theorists posit such laws might or might not operate to the benefit of the groups they're attempting to aid. One position holds that the laws, by imposing increased enforcement costs on firms, disincentivize them from hiring the group in question. For persons already hired, these laws act as forced benefits -- if a firm willing to spend X amount of resources on a given employee, the amount they are forced to expend to stay in compliance with specific laws or regulation will simply be taken away in other areas (salary, benefits, hours, etc.). This model also posits that the market should resolve invidious discrimination, because firms which don't discriminate should be able to seize a competitive advantage by exploiting the labor of otherwise superior workers irrationally excluded by their competitors.

With regards to sexual harassment, however, an alternative view emerges. Harassment can be seen as a form of "economic warfare" waged by insiders (i.e., men who already have jobs) against outsiders who might underbid them and thus deprive them of established benefits. By withdrawing their cooperation (i.e., harassing), the men can lower the productivity of the competing group, removing their competitive advantage and prompting firms to either refrain from hiring or dismissing women. The dissenting position explains why firms don't quash discrimination themselves by noting that the insiders may be risk-averse to any changes in the employment structure. It is also possible that the managers in a position to enforce an anti-harassment norm may also be the very "insiders" benefiting from it (indeed, there is research indicating that women in supervisory positions are more likely to face harassment than non-manager women).

To test these models, Chen and Sethi examined how labor markets shifted in response to sexual harassment decisions by federal courts, specifically, how firms responded to plaintiff "wins" at the appellate level (the authors use the idiosyncratic variation in pro plaintiff decisions provided by the random assignment of judges (of particular gender and party affiliations) to panels). Disaggregating the results amongst the federal circuits helped provide variation in results for comparison purposes. They found that sexual harassment law reduced gender inequality by 1.3-15% in the areas of employment status, hours worked, wages, and management status -- seemingly buttressing the dissident view and differentiating harassment law from other areas, such as disability and maternity benefits, where the dominant view had been borne out via empirical research.

Digging deeper into the results, at least two further findings stand out. First, the reduction in gender inequality was enjoyed predominantly by women who were not already in the workforce. This is consistent with the insider/outsider model forwarded above: that harassment law prevents entrenched actors in sex-segregated occupations from locking out newcomers. Reducing harassment prompts women who were previously outside the workforce to enter, but women who already have jobs see little change. Second, the results demonstrated that firms respond to victories by sexual harassment plaintiffs regardless of how large or small the damage award is. This indicates that the response by the firms was motivated less by a desire to avoid the monetary sanctions of a damage award, and more by reputation or other less tangible costs associated with the risk of being seen as a harassment-friendly workplace.

Audio: Epstein on Bilski

Continuing with today's Epstein/Fed Soc theme, the Federalist Society has posted a recording of Prof. Epstein discussing Bilski v. Kappos. The SCOTUS heard oral argument in the case on November 9. According to the Fed Soc site,

The issue in this case is whether a "process" must be tied to a particular machine or apparatus or transform a particular article into a different state or thing in order to be eligible for patenting under 35 U.S.C. § 101.

You can download the podcast here.

Video: Richard Epstein on the Redistribution of Wealth

Over on the Federalist Society's YouTube Channel, they've posted an 11-part series entitled "Redistribution of Wealth," recorded at the 2009 National Lawyers Convention on Thursday, November 12, 2009. Our own Richard Epstein was one of the discussants.

Other participants included Steve Forbes, Chairman and CEO of Forbes Inc. and Editor of Forbes Magazine; Prof. Jed Rubenfeld of Yale Law School; Andrew L. Stern, President of the Service Employees International Union; and Judge J. Harvie Wilkinson III of the U.S. Court of Appeals for the Fourth Circuit as the moderator.

Student Blogger - Think of the Consequences

Imagine you are the newly appointed director of the Centers for Disease Control. You are reviewing a report that suggests that a new vaccine is likely to prevent thousands of deaths from an impending outbreak of a new viral epidemic. However, vaccines like this one have had problems in the past, causing many recipients to get severely ill. You call your two most trusted advisors, Ben and Kent, into your office and explain your problem, and say, “Look, fellas, I’m not going to play politics here. I want to do the right thing.”

Ben quickly chimes in, “This is an easy one. You only need to look at the total social benefits weighed against the total social costs. Avoiding thousands of deaths sounds like a lot of benefit, so I say release the vaccine.”

Kent interjects, “Wait. Don’t you remember your Hippocratic Oath? You have a moral duty to do no harm. That has to be your guiding principle.”

This exchange leaves you in a bit of a muddle. Should you start by aggregating harms and benefits or should you start from an acknowledgment of a duty to respect the inviolability of each individual affected by your policy choice? What did Kent actually advise you to do?

Stanford Law School’s Barbara Fried is skeptical that any answer derived from a duty-based theory like Kent’s can get off the ground. Fried presented her argument from a forthcoming book on risk regulation at the Law and Philosophy Workshop.

Student Blogger - Lunchtime Talk: Virtue and Drug Use

As the State of California prepares to debate whether or not marijuana should be decriminalized, the Federalist Society sought to resolve an issue of higher magnitude: whether virtue and drug use are incompatible.  The lively lunchtime debate featured plenty of snacks and The Law School’s own Professor Richard McAdams and Professor John Baker of the LSU Law Center to hash out an answer.

The most surprising part of the debate was that there was not much of a debate on drug laws at all.  Both professors agreed in general the that so-called “war on drugs” had largely been a waste of resources given its growth to a multi-billion dollar economic intrusion and espoused general support for the DOJ’s new stance on marijuana.  As for whether virtue and drug use are incompatible, let’s just say the professors agreed that everything in moderation was a good creed to follow.  Who says you can’t pass on a question in law school?

Professor Baker began with a summary of the medical marijuana laws in California and wondered aloud whether AG Holder was a libertarian or just soft on crime for the DOJ’s reversal on prosecutions.  Given that there are over 4,500 federal crimes, only a small fraction of which are actually enforced, Baker proposes that it just might be an end to the unjust and disproportionate focus on drug laws.  Baker even went as far to say that he thinks that the federal government should be out of the business of governing people altogether. 

For drug cases in particular, federal policies blur the line between crimes and simple regulatory offenses.  To Baker, crimes are acts that need to be prohibited while regulation says what you are doing is actually okay, just let me—the federal government—tell you how to do it.  Thus, the federal government spends money on labels and chasing regulatory offenses disguised as crimes in order to justify their existence. 

Amended Google Book Search Settlement

If you are following this issue, I have a quick new paper on the amended Google Book Search settlement. You can download the paper here.

Student Blogger - Fall WIP: Youngjae Lee asks What's Wrong with Disloyalty?

Disloyalty occupies a special place in the law. It gets its very own constitutional clause (Article III, Sec. 3). Over British history, persons convicted of high treason could expect to receive particularly harsh punishment well above that of other felonies (hanged, drawn and quartered for men, burning at the stake for women). Yet missing from this account is a seemingly very simple question: What's Wrong with Disloyalty? And this was the subject of visiting professor Youngjae Lee's fall WIP talk.

Before reaching the meat of his paper, Professor Lee first disaggregates "nonloyalty" from "disloyalty". Loyalty, Lee argues, is a feeling or sentiment towards an institution such as a state. Nonloyalty is the lack of such sentiment. Disloyalty, by contrast, involves some overt act harming the entity. The distinction matters, because it helps diminish one of the intuitive problems many have with policing disloyalty in the first place: that it will punish thoughts (or worse, lack of thoughts). While most of us maintain an intuition that disloyalty is a bad thing and probably worthy of punishment, we simultaneously fear mass arrests because one failed to attend a Veteran's Day event or failed to cheer loudly enough for team USA at the Olympics.

However, even this does not get us all of the way there. If disloyalty to the state involves taking some overt act against it (or in favor of a rival), and even if we expel pure speech -- such as rooting for the Canadians against the Americans at the Olympics (full disclosure: as a kid, I typically rooted against team USA in international competitions, primarily out of an instinctive empathy for the underdog. To borrow from and update Joe E. Lewis, in 1992, rooting for the American Olympic basketball team was like rooting for Microsoft -- it just seemed unsporting) -- we could still imagine something like agreeing to be a waterboy for team Canada. An overt act? Yes. "Disloyalty"? Seems harsh.