The University of Chicago Law School Faculty Blog

Supreme Court Blitzes NFL in American Needle

In the National Football League, 9-0 means three field goals, perhaps a tight defensive battle in the snow in the NFC’s black-and-blue division. In the Supreme Court, 9-0 is a shellacking. The NFL could have just been content to run out the clock, but instead, it got fancy and threw one away. The Supreme Court issued its opinion in the American Needle case this morning and ruled that the actions of the NFL in licensing its trademarks for sports gear were collective actions subject to Sherman Act Section 1 inquiry.

Federalism in the Second Generation: A Reply to Professor Hamilton

Thank you very much, Professor Hamilton, for this tremendously thoughtful and incisive review of my book. These are extremely helpful comments, and some of them touch on new projects that I am currently working on, so I’d like to offer a few thoughts in response.

As Professor Hamilton notes, the book differs from much previous scholarship focusing on the ideology of the founding period because it extends into the early Republic. As I continue to think about the issues in the book, I’ve become even more convinced that the early republican and antebellum stories are the crucial next chapters in the story. One of the book’s principal claims is that a normative vision of divided sovereignty predated, or at the very least accompanied, the rise of popular sovereignty that Bernard Bailyn, Gordon Wood, and Edmund Morgan, among others, have placed at the center of the political and legal changes that occurred during the Revolutionary and founding periods. This vision of American government as designed to be divided clearly began as a response to the eighteenth-century Anglo-American fear of imperium in imperio, or dominion within dominion. By the early nineteenth century, this commitment to divided government, and the difficulties of building institutions to instantiate that theoretical commitment, had become the central question of American law and politics. We often view early republican and antebellum debates through the lens of state-versus-federal power, but I would argue that that issue was in fact the contemporary incarnation of the bigger, unsolved question of how governmental authority was to be divided between polities – and which institutional actors would get to make that determination.

One good example of early-nineteenth-century Americans’ struggle to give real, concrete meaning to the theoretical commitment to multilayered authority can be found in the controversy over federal jurisdiction in the 1810s and 1820s. Many members of the founding generation had seized on a division of governmental power along subject-matter lines as an escape hatch from the imperium in imperio problem. For the early republicans, this theoretically tidy separation became fraught with controversy as they attempted to apply it to specific issues – e.g., federal funding for internal improvements such as canals and turnpikes; tariffs and other forms of taxation (which, according to the terms of Article I, was understood to be a concurrent federal and state power); and, perhaps most fundamentally, the jurisdiction of the lower federal courts.

Federalists such as Chief Justice John Marshall, and federalists in spirit such as Republican justice Joseph Story, argued that the union must be cemented both by federal oversight over state courts (in the form of appellate review by the Supreme Court) and by federal courts with original jurisdiction over a broad array of issues that they conceived of as necessarily federal – i.e., cases and questions “arising under” federal law. Inheritors of the Antifederalist viewpoint, such as Virginia judge Spencer Roane, contended that appellate review of state-court decisions by the Supreme Court violated the very principles of dual sovereignty that underpinned the entire constitutional structure. Instead, Roane claimed, federal supremacy required only that the state judges regard themselves as bound by federal law. Roane thus argued for a minimal, textually defined mechanism of federal control over state courts, while Marshall and Story insisted that some cases and legal questions were so inherently “federal” that they must be handled within the federal system itself. Thus Story’s statement in Martin v. Hunter’s Lessee (1816) that “[i]t is the case, then, and not the court, that gives the jurisdiction.” Simply put, the issue of the lower federal courts brought into conflict two older visions of how the formal separation of subject matter between the levels of government would actually work in practice. And, as the debates among Marshall, Story, Roane, and others in the 1810s and 1820s demonstrate, the particular political issues of the antebellum period – most notably, the ongoing controversy over the constitutionality of the Bank of the United States – galvanized the old debates about multilayered authority into new and complex forms.

I greatly appreciate Professor Hamilton’s comments and, in particular, his request for more of the nitty-gritty, real-world debates – the “contests over power and law and wealth,” as he puts it, that lie behind the intellectual battles of the period. And I look forward to elaborating on the early republican and antebellum incarnations of those messy debates in future work.

Scanning the Public Domain

I am working on a paper on the history of razors and blades (yes, I know that sounds obscure, even for an ivory tower sort; I’ll leave it to another day to try to persuade you that you should be fascinated, too). I have been reading turn of the century—that is the 19^th century—catalogues. The 1895 Montgomery Ward & Co. catalogue was a wonder. Montgomery Ward was the Amazon of its day, a market leader in the mail-order business. Local stores, especially outside of big cities, might offer only a limited selection, but Montgomery Ward promised the world to the entire country. Catalogue No. 57—Spring and Summer, 1895—was a behemoth, running 624 pages and offering tens of thousands of items for sale.

Hiding in Plain Sight: A Review of The Ideological Origins of American Federalism by Alison L. LaCroix

Professor LaCroix's new book is a major addition to the dominant interpretations of political authority in the era of the Revolution and the Constitution.  We are familiar now with the foundational work on political ideology by Bernard Bailyn and Gordon Wood, and also with the new institutional and Atlantic histories of Jack Greene, Christine Desan, Dan Hulsebosch and Mary Sarah Bilder.  To oversimplify, the focus of this ideological history is revealing the conceptual framework of those who successfully pressed for revolution.  The focus of the institutional histories is to situate the creation of the new American nation within a broader context of empire and imperial practice.  Professor LaCroix in her history of the origins of American federalism, draws on each but also effectively suggests the need for a new category of analysis. 

Of the two schools of thought Professor LaCroix is clearly more at home in the first.  The book, as it sets out to do, successfully "brings ideology back into the discussion of the meaning and significance of federalism in the founding and ratification periods." (5)  Yet she parts ways with this earlier ideological work in two important respects.  First, her analysis takes us beyond the Revolution and the ratification of the Constitution, telling a story that does not culminate in Philadelphia but instead reaches into the early republic.  Second, she does not locate the origins of federalism within republican ideology, the chief driving force in so much ideological work of the founding era.  Instead, Professor LaCroix is interested in the history of what she calls "the federal idea" or "the broader context of the development of federal thought" from the 1760s to the beginning of the nineteenth-century.

This federal idea is much more sophisticated and powerful, and also more elusive, than the common depiction of federalism.  The federal idea is more than the battle between state and national power that confronted the framers of the Constitution, and the textual accommodations they reached.  It is more than the division of authority between state and federal governments in the service of limited government and popular sovereignty. The rise of the federal idea is instead a richer story of "the emergence of a normative vision of multilayered government."  This vision drew upon earlier ideas of divided authority in the work of Jean Bodin and Thomas Hobbes, and also the practice of divided government in Scotland and Ireland inside the British empire.  It was, however, transformed into a dominant strand of American political thought in the decades from the Stamp Act to the Judiciary Acts of 1789 and 1801. 

Over the decades, in multiple political and legal disputes over British imperial policy, this federal idea was debated and refined and led ultimately to "a newly defined federal ideology" in which sovereignty was not linked to territory, be it colony, state or nation, but was instead tied to "particular substantive objects."  Jurisdiction, or power, was "bounded by subject matter, not by political space."  In the hands of political and legal elites, this emerging ideology was "defined by a belief not only that lines could be drawn between sources of authority, but also that such line drawing was desirable as a normative matter."  In disputes over the Stamp Act, the Coercive Act, and into the creation of the Continental Congress and the Articles of Confederation, an ideology took shape that held as its premise that authority could and must be divided, or layered, among and between "parallel and nonoverlapping repositories."  How power ought to be divided between these layers of course remained central and contested, but Professor LaCroix's accomplishment is to show us a concept of sovereignty, based on "subject -matter-specific principles" that "ultimately provided the foundation for the American federal experiment."  This concept of government was, as she shows, at the heart of the debate at the constitutional convention, but did not begin or end there.  The framing of the Constitution is a vital point in the story of American federalism of course, but it is at the same time part of a much longer and richer intellectual trajectory. 

In its treatment of the emerging idea of federalism in the founding era, it is not too much to say that Professor LaCroix's book has done a great deal to change the terms of the debate.  We must now take account of the "federal idea" because she has so effectively demonstrated that this idea was at the center of American political and legal thought in a way we have not seen fully before.  In this book we encounter the usual suspects, Jefferson, Madison, and Marshall among others, but we have a new frame in place in considering the content of their ideas.  It is an exciting discovery, and once we are shown it, we cannot stop seeing it texts we thought had been largely mined to exhaustion, including the Federalist, Jefferson's inaugural address, not to mention the Constitution itself.  Just as Bailyn and Wood showed us a republican ideology that explained so much, and ultimately perhaps too much, here Professor LaCroix shows us an idea of federalism central to the framers that we have not considered in full, either because we were not looking for it, or looking at a single point in time, the summer of 1787 in Philadelphia, and so missed the progression, and even the content, of this foundational idea. 

Still, like all groundbreaking work, this book raises methodological questions, and I would like to raise two.  First, if Bailyn and Wood do ideological work on a grand canvas, Professor LaCroix's work is more an exquisite pointillism.   The book moves primarily by careful attention to emblematic texts, which leads to an in-depth and subtle readings of the sources.  This approach necessarily cannot take account of a broad swath of material.  Professor LaCroix's claim is to be sure fully supported in its account of ideas of federalism among the leading political and legal thinkers in the founding era.  We now need more work on the breadth of this ideology.  Part of the explanatory power of an ideological examination of the Revolution that focused on republicanism is the way it bridged political, regional and class divides in the service of fighting a long and bloody war.  Thus republicanism had high and low and middling manifestations.  It may be that federal ideology did as well. but we do not know that yet.  This is not a call for Professor LaCroix to write a different book, only a question about the social and political reach of the ideology she explicates so well. 

Second, and in a related point, Professor LaCroix's treatment of the federal idea is somewhat disconnected from specific political conflict, particularly in the framing of the Constitution.  The book is so careful not to fall into the trap of reducing the convention to a one-dimensional battle between Federalists and Ant-Federalists that it largely does away with categorizing the debate over federalism altogether.  We need to know more about who was doing intellectual battle and why.  One does not need to be a Beardian to view the constitutional convention as a high-stakes battleground, and the story as presented by Professor LaCroix is a little too clean, or not yet enmeshed enough in the furious contests over power and law and wealth that made the passage and ratification of the Constitution such a near thing . We are thankfully past the point where we have to choose between ideology and interests as driving historical change, and Professor LaCroix is sensitive to context and the force of competing commitments.  Yet we do need to know more about how the ideology she analyzes was grounded and contested, if not between Federalists and Ant-Federalists than between what other factions or nascent political parties. 

This book is driven by a new insight into the founding era, and its main accomplishment may be to re-orient us to the content of fundamental debates and documents, to re-frame our understanding of these debates closer to the way it was understood by the historical actors themselves.  We can count on more work that will teach us more and more about the federal idea, and we can thank Professor LaCroix for helping us see how little we knew and how much we still need to learn about something we thought we knew so well. 

Daniel W. Hamilton

Professor of Law and History, University of Illinois College of Law

Watch This Space: Hamilton to Review LaCroix Federalism Book

Professor Alison LaCroix's new book, The Ideological Origins of American Federalism, delves into an underexplored area of history, shedding light on the nature of a system so important to the development of America. Given the ongoing debates about the framers’ original intent, understanding the true origins of federalism is especially significant. The book has been making a great impression in the legal history world, being called "splendid," "a great achievement,""important," and "groundbreaking."

Dan Hamilton, Professor of Law at the University of Illinois College of Law, will review Professor LaCroix's book in this space shortly. We look forward to a robust discussion of the book and of the history of federalism, and expect a lively set of comments.

Epstein Debates Internet Censorship

The State Department's America.gov site is currently featuring a debate between Richard Epstein and Derek Bambauer of Brooklyn Law School, in which they discuss whether government censorship over the internet is ever justifiable. You can join the debate here.

Ambiguity in Legal Interpretation: Wrapping up

Although there is certainly more to discuss, it is time to close the blog debate over Ward Farnsworth's and my recent empirical work on the role of policy preferences in statutory interpretation.  I want to thank Judges Frank Easterbrook, Richard Posner, and Stephen Williams and Professors Einer Elhauge, William Eskridge and Ward Farnsworth for participating.  Finally, we owe a special debt to Jonathan Masur for organizing this event.  It was a very fruitful discussion.

Two Answers for Judge Posner

I said that I thought the Justices in the gun use case could have passed polygraph tests in which they said their semantic arguments were a substantial basis for their decisions.  In reply, Judge Posner has asked me two questions.  Here are my answers.

1.  What is my basis for thinking this?  Conversations with judges.  For anyone who does empirical studies of judicial decisions, and finds evidence of what seems like ideology at work in them, it is common enough to be told by a judge something like this: "that's interesting, but it doesn't square with my experience -- when I decide cases, I really feel that I'm making decisions based on legal materials, not policy preferences."  I have been told that sort of thing a number of times in conversations about these same issues, and I don't think the judges who have said it are being disingenuous.  (Sometimes objections like these are made public, as by Harry Edwards of the D.C. Circuit.  I don't agree with him, but I don't think he is being disingenuous, either.) 

The implication of the question, and of Judge Posner's earlier remarks, is that he doubts the polygraph test would be passed.  I would be interested in hearing speculation about this from the other judicial participants in this panel (but I sense a danger of circularity here!). I think polygraph tests of this kind are an exciting and amusing frontier in empirical legal scholarship.  If Judge Posner can persuade his colleagues to take them, I will start hunting up grant money. 

2.  Suppose they did pass the test; what would that show?  It would show that (a) they thought those semantic arguments were important, and didn't intend them as a smoke screen; and that (b) they thought that by relying on semantic arguments, they were deciding the case on grounds independent of their policy preferences.  Point (a) would fortify our claim that it's worthwhile to study how semantic arguments work, as we have been doing; for they are serving some function (but what?) in judicial decisionmaking.  As for point (b), despite the polygraph results I would not conclude that the semantic grounds really were the basis for their decisions in any deep sense.  On the contrary, I would point to our studies and suggest that the semantic arguments probably felt attractive because they squared with the judges' policy preferences.  So perhaps the semantic arguments are best viewed an unintentional or unconscious smoke screen (or maybe as a way to reduce cognitive dissonance, to use Judge Posner's phrase).

And so I would say:  beware semantic arguments; they sound unconnected from policy preferences, but easily get entwined with them and express them even if you don't realize it (arguments about language can feel very convincing, like they have nothing to do with preferences, but that feeling is unreliable).  If you really do want to argue about semantics and not policy, we have found a method that might make this somewhat more likely to work, though the method may or may not be attractive in any given case for reasons we talk about in our papers (Judge Posner would probably never like this approach).  If it turns out that you actually want to argue about policy and not semantics, then it would be better to stop pretending that semantics are the issue.  (Here I think Judge Posner would agree.)

Two Questions for Professor Farnsworth--Posner

In his latest post, Professor Farnsworth says: "I expect that the Justices who decided the gun use case could have passed a polygraph test in which they said the semantic arguments were a substantial basis for their decisions." Two questions: 1. What does he base this expectation on? 2. What would their passing a polygraph test show? That semantic arguments were a substantial basis for their decisions, or that (to avoid cognitive dissonance) they merely thought they were?

Student Blogger - Law and Economics Workshop: Product Liability... Dispelling the Hype

Last week, Professor Mitchell Polinsky presented his paper, The Uneasy Case for Product Liability (co-written with Professor Steven Shavell), available at http://www.law.uchicago.edu/files/files/Polinsky.pdf, to question whether the benefits of product liability outweigh its costs.

What It’s About

The general consensus out there is that product liability is a good thing. Punishing “bad” firms may incentivize these least cost avoiders to invest more in product safety. Firms pay for lawsuits by raising prices, so that the price accurately reflects the risks that customers were underestimating. Victims get money.

But not so fast. What if the consumer market and regulators already provide those same benefits, so that product liability is largely duplicative? Professor Polinsky points to several empirical studies to show that the rise of product liability torts has had no noticeable effect on accident rates. He notes that, for widely sold products or for markets where the consumers are especially knowledgeable, firms and regulators already have an incentive to improve product safety. Product liability may play a non-redundant role in helping publicize risks or internalizing costs where consumers are underestimating product riskiness or the cost of third-party injuries... but these incremental gains may be outweighed by the cost of maintaining the product liability system:

When companies raise prices on consumers to pay for their tort liabilities, they aren’t just internalizing the cost of the injury risk (something that consumers would care about); they’re also passing on the cost of litigation (which consumers don’t care about) and the cost of pain and suffering damages (while consumers care about compensation for pain and suffering damages, the price rise more than offsets this benefit). Most consumers, if given the choice, wouldn’t buy insurance for pain and suffering, and yet the product liability tort, by awarding damages for these intangibles, basically forces all consumers of the product to chip into a court-run insurance scheme in the form of product liability. Raising the cost of the product to pay for “benefits” that consumers don’t really care about may take desirable products out of the market.

What Was Discussed

The first exchange of comments focused on why the market alone might not accurately price for risk. Consumers might have disproportionately adverse reactions to dramatic news stories, even if the actual risk of failure is small. Companies may seek to remedy a product defect with better advertising, rather than better safety features.

Other participants noted the difficulty of tracing the effect of product liability, since contemporaneous changes could affect the data. Perhaps the development of superhighways and new technology had more to do with changes in safety than product liability. Perhaps the damages rate didn’t go down because more defects were being discovered and counterbalancing the positive effect of product liability suits. Perhaps the increase in lawsuits reflects the increased ease with which plaintiffs could raise product liability claims during the 70s. To these, Professor Polinsky responded that the most reliable way to measure whether product liability actually had an effect would be to measure the underlying accident rates—and those stayed the same. Perhaps, as one participant suggested, there could be a geographic comparison across jurisdictions. (That, too, might have problems, since a national or international firm, facing a higher level of liability in, say, 48 out of the 50 states, might find it cost-effective to cater the product to the 48 states and let the two outlier states free-ride on the benefits.)

At this point, the conversation shifted to a discussion on the correct response. If product liability is ineffective because courts are “dumb,” why not educate courts instead of getting rid of product liability altogether? Why is ex ante regulation better than ex post litigation? Professor Polinsky clarified that his paper doesn’t aim to show that regulation or some other mechanism of increasing safety is superior to product liability; rather, his aim is to suggest that, assuming all other mechanisms are in place, product liability’s benefits isn’t worth its own maintenance costs.

Toward the end of the discussion, Professor Polinsky returned to the question of why he chose to focus his critique on product liability. He noted that product liability is different from many other torts because the market is more of a corrective force here than in other torts. Product liability torts look a lot like regulation, except that product liability imposes a cost without controlling how the company should respond. The existence of these other effective mechanisms may make the usefulness of product liability torts more questionable.

Two Cents...

If product liability’s costs outweigh its benefits, why not just make it less costly rather than eliminating it? Professor Polinsky’s paper already identifies the areas where costs are greatest: litigation costs and pain and suffering costs. One participant already suggested one way to reduce litigation costs: force companies to automatically pay upon a showing of injury. Other participants seemed very resistant to the idea, since even in a strict liability regime, there needs to be some showing of causation (e.g., if a “victim” sues a drug company for an unsafe drug, he must at least prove that he took the drug) for the tort to have the correct deterrence and pricing effects. However, the underlying point—that we can do something to reduce costs rather than scuttle the whole system—seems like a good suggestion.

For example, Professor Polinsky mentioned the possibility of switching to the English rule in product liability. Another way to reduce litigation costs would be to have a truncated adjudication for certain product liability mass torts. For example, in settling asbestos class action suits, courts have bound future claimants to adhere to an expedited, largely administrative process. Similarly, worker’s compensation programs preclude employees from litigating their injuries in tort, binding them to a predetermined schedule of damages.

Also, courts could refuse to award pain and suffering damages. Even if there is no such thing as pain-and-suffering insurance plans, those who have idiosyncratic enough risk preferences to want such insurance could buy extra protection for those misfortunes that they suspect will lead to pain and suffering, via health or life insurance. And to the extent that society has a visceral or moral desire to vindicate pain-and-suffering victims, perhaps the emotional distress torts or criminal penalties are a better avenue for such feelings than product liability.

All this is simply to suggest that, even supposing that Professor Polinsky’s point is correct—that product liability is too costly—it’s still an open question what courts should do with this new insight, maybe a question for papers to come.