The University of Chicago Law School Faculty Blog

Student Blogger - Chicago’s Best Ideas: Dean Saul Levmore on “The Internet’s Anonymity Problem”

Update: Dean Levmore's talk is now available as an .mp3 file.

The walls of the Law School's bathroom stalls used to display the student body's complaints about professors and fellow students, but the internet made those walls obsolete. Is the internet different from the bathroom stalls in some fundamental way? Does the internet mark a break from the paradigm of previous media? Dean Levmore does not think so.

On Tuesday, November 11, Dean Saul Levmore gave a talk on "The Internet's Anonymity Problem" as part of the Chicago's Best Ideas lecture series. His main contention is that the internet is not different from other media and should be subject to the same legal regime. Currently, it is not; § 230 of the Communications Decency Act provides that internet service providers (ISPs) are not publishers with regard to user-generated content, so they are for the most part not responsible for online torts committed by their users. (One questioner pointed to Fair Housing Council of San Fernando Valley v Roommates.com (9th Cir 2008) (en banc), where Judge Kozinski wrote an opinion holding a website liable under the Fair Housing Act for discrimination committed by its users, but Levmore remarked that the case is an outlier because, after all, it was written by Judge Kozinski.) If a newspaper, on the other hand, publishes a defamatory letter to the editor, the newspaper may be sued. The most commonly cited reason for the nonpublisher rule in the legislative history of the Act is that the internet is a new medium, so it should be allowed to develop and flourish. But the Act was passed twelve years ago, and the internet has matured since then, so it is time to take stock.

Election Aftermath

Congratulations to our friend and colleague, Barack Obama, on his election. Some thoughts and reflected glory can be found at  http://www.law.uchicago.edu/news/obamaelected/index.html and http://www.uchicago.edu/features/20081105_election.shtml.

In true Chicago style, we will no doubt soon begin criticizing and second-guessing, but for just a day or two it seems appropriate to enjoy the frenzy, the obvious elation of a new generation of students, and the remarkable talents of a neighbor and member of our community.

Politics is a field where path dependence is obvious to everyone. If Bush had lost in 2004, Obama would be a "mere" senator. If the timing of the financial crisis had been different, if the sitting President had been more popular, if McCain had been of a different age, if he had selected a different running mate, or if he had been governed by a different system of campaign finance (or Obama had accepted public financing and its constraints), the outcome might have been different. When an election is not close, it is unlikely that any one thing caused the outcome, and so it is especially hard to know which of these variables played important roles. Somewhat similarly, events in the next year or two will not all be caused by President Obama's decisions, but many will be influenced by them. We wish him good luck in things within and beyond his control, even as we know that luck is the wrong word. To a degree, these wishes are self-serving, not only because we are fellow citizens but also because success will likely be perceived as indicating positive things about an elite education and even about our Law School in particular.

Personal Seat Licenses

Here is a puzzle: What explains the fact that some businesses sell multi-year uses and others do not - and why do some offer mixed strategies? I am offered multiyear subscriptions to magazines but not to theaters. Perhaps the transaction costs of renewal are substantial, and we find more multiyear arrangements for less expensive goods. In most cases, I'd think the seller would at least offer multiyear deals because buyers might overestimate their own future demand, based on their current preferences. If I love attending the games of my local football team, then the team might try to lock me in by selling multiyears season's tickets or, the right to buy these tickets in the form of a "personal seat license," or PSL, which gives the holder the "right" to buy or rent those seats season after season. Typically that PSL can be sold after a modest holding period and, unsurprisingly, the value of the PSL has often risen, much as taxi medallions can rise in value. The arrangement is puzzling because the PSL/season-ticket-holder is often in the business of reselling some of the tickets, and we would think that the team or stadium is better situated at locating buyers for single games. It is as if an airline sold me seat 12D for every monday morning flight to Dallas, and I needed to resell that seat when I had no use for it. Neither the airline seat nor the stadium seat is much of a "security," as we normally understand that legal term, because the value does not (or at least not much) rise or fall with an uncertain future. It is more like a magazine subscription than it is like a share of Ford. Note that the PSL represents a mixed strategy; the buyer does not pay in advance for five years of games, but rather pays part of the fee upfront and then pays the issuer a substantial amount per game or per season later on. I suppose the PSL might simply be a means of avoiding sticker shock, though that is a weak explanation.

PSLs are normally explained as a means of raising money upfront --and indeed in Europe they are called debentures. If the a footbal team needs $1 Billion for a new stadium, one means of financing is to sells PSLs at the start and, effectively, promise lower ticket prices later on; PSL holders are normally protected with the promise that ticket prices will only rise by 4% or some other cost-of-living kind of increase each year. But this explanation misses the point that seats could be sold in five year blocks, like magazine subscriptions. In any event, lenders would be willing to take future seat receipts as security. It returns us to the puzzle of multiyear sales, and adds the puzzle of why PSLs or medallions in some industries but not in others.

My tax-wise colleague Julie Roin suggests that the seller may plan to allocate the cost of the stadium in a way that assigns some substantial fraction of the cost to the "seats," and then the PSL receipts would mark the begining of the return of this investment, but not yield any taxable income. If so, the PSL approach is clever - though I note that at least one blog reports the NY Giants's owner as saying that half the revenue from PSL sales would go to taxes.

One problem with multiyear sales is that when the scheme is started, current management has revenue that it might be tempted to spend, rather than to save for future years when it must still produce the product (theater production, sporting event, taxicab rides). There are journals that sell life subscriptions, and my understanding is that the revenue is put aside and income is attributed to each year's budget. And of course most durable goods can be bought or rented, and when they are purchased outright, management must be counted on to set resources aside to make good on warranties and other costs associated with future years. Thus, one can rent a car by the day or week, lease it by the month or year, or "buy" it in order to have the right to its ten year or more lifetime. Toyota specializes in the last two markets, and it leaves short-term rentals to others. Similarly, the stadium owner might leave short-term rentals to intermediaries, including the purchaser of a PSL. Except that it does not.

It cannot escape attention, at least on this blog, that universities sell something like PSLs. An admitted student comes close to having the right to buy x four or three years of education, and the school, by convention, limits tuition increases to something close to the cost of living. PSLs can, however, be resold, for the Giants seem happy to have any fans in those seats.

The Rule of Law and a Petition Regarding the Russian-Georgian Conflict

In today's e-mail I was invited to sign on to a letter initiated by two fellow deans with experience "in the project of building a stronger legal education system and a system of accreditation for law schools" in Georgia, as part "of a larger project, aided by resources from the ABA and USAID, to promote the Rule of Law in Georgia by building an independent judiciary and a strong and independent legal system." Their professional colleagues in Georgia have asked for support from legal educators in the United States and Europe in trying to stop the violations by Russia of international norms and of Russia's efforts to defeat the progress of Georgia toward the Rule of Law and its values. They go on to say that they do "not seek to take sides in the underlying political and ethnic controversies. We seek only your support for the Georgians' desire to have freedom from military attack and from interference in their work to a strong system of justice and law."

I rarely sign petitions, in part because I think that something worth saying is worth saying in one's own voice, though I like to think I would have signed the Declaration of Independence. Group letters come with a kind of agency problem. Someone asks you to sign a letter, and you have less ability to inquire into the facts behind the cause, and so forth. Here, I think we tend to root for Georgia because they, or at least members of the current government, are Western-leaning, like the U.S., and seek to emulate us and certainly, as we see, some of our institutions. I share these sentiments, I confess.

It is the "Rule of Law" thing that irritates. I think this is an expression I will eliminate from my own vocabulary. I take it to mean a devotion to the idea that law is above any individual, that we should not be tyrants who proceed on our own in the face of legal opposition, and that we need to effect change through the prevailing legal system, properly constituted. Unfortunately, in every conflict, both sides can argue about whether the Law was properly brought into being. Moreover, there are so many examples of heroic objections to the apparent Rule of Law that it is hard to know where to begin. Whenever there is conflict or terrorism or all-out war, educators and judges can say that the conflict is interfering with the Rule of Law because it makes the place less safe for intellectual inquiry, not to mention the accreditation of law schools. Thus, I suppose the same letter could have been issued after Georgia overplayed its hand by launching an attack on Tskhinvali, capital of South Ossetia. In that case, the letter would have declined "to take sides" but would have criticized the attack as bringing about instability and thus threatening the Rule of Law. I do not mean to say that everything is contextual, that there are no rights and wrongs, and all that. We do need a vocabulary to object to tyranny, to oppression, and to unnecessary violence. But I do not think that the Rule of Law provides, or any longer provides, the right words or sentiment. It is simply too easy and far too common for both sides in a debate to claim the Rule of Law. And in the Georgia-petition case, if it simply means that stability and peace are helpful to one's enterprise, then again too much can be said to offend the Rule of Law. 

I think these petitions do have meaning. Readers of newspapers are often confused about issues of the day and the citizenry can be influenced by news of a large number of educated persons choosing to speak out. Moreover, it is good to speak out. But I would rather not do so under the guise of protecting the Rule of Law.

Audio: Randy Picker's Hooding Ceremony Address

Friday was graduation day here at the Law School, so please join us in wishing heartfelt congratulations to the Class of 2008 and to their families. As is tradition, along with the University's graduation ceremony, the Law School hosted a hooding ceremony in Rockefeller Chapel. During this ceremony, graduates receive the distinctive purple hood that is worn during formal academic events by those who hold degrees in law.

This year's faculty speaker at the hooding ceremony was Randy Picker, Paul H. and Theo Leffmann Professor of Commercial Law, and a frequent contributor to this blog. You can listen to Randy's address here; he was introduced by Dean Saul Levmore.

Update: A transcript of Professor Picker's speech is also available.

Cellphone Fines

Why do we see fines for littering but but not for cellphones ringing in the middle of movies and concerts? I'm afraid the question is better than any answer I have to offer. A private tort suit against the rude and negligent cellphone owner is plausible, but damages are difficult to determine, and the nuisance, though I use the word sloppily, affects many people. The apparent absence of a negligence suit might be attributed to this problem of injury and damage assessment. But the same could be said  about a fellow who "negligently" lets a paper bag and its contents fly out the window of his car. In that setting, we resort to fines rather than torts, though that must be in part because the littering is on public property. The cellphone wrong is often on private property, and littering is normally a misdemeanor on public property.

Audio/Video: Levmore on "Climate Change and the Battle of the Generations"

Why have we taken so few precautions in the face of threatening climate change? In a February Chicago's Best Ideas talk entitled "Climate Change and the Battle of the Generations" Dean Saul Levmore focused on the difficulty of dealing with a long-off threat in our political system.

The question, he says, is how voters and their politicians can be encouraged to care about problems that can be deferred for consideration by a different electorate or set of taxpayers – but at much higher cost. We know that we should solve most long term problems sooner rather than later, but there are pressures that put off painful solutions. Dean Levmore draws on what we know about “median voters” and median citizens in order to hazard guesses about the coming battle among generations. In this “battle,” young voters will grow increasingly concerned about what is likely to occur as they age – but these voters do not yet have sufficient political power. In turn, arrangements among countries will be seen to depend in part on the disparate age profiles of countries. The topic, in other words, is global warming and the public choice problem of intergenerational bargaining.

Unfortunately, technical difficulties are preventing us from embedding the video in this blog post, but Video of the event is embedded below, or you can download and/or view a Quicktime (.mov) file. If video isn't your thing, you can download/listen to an .mp3 file.

The Case for the Virtual, Free of Law, World of the Playman Islands (Blog Debate: LIV)

I'm a bit disappointed in Orin's examples and responses, because I was hoping someone would argue that we ought to work hard to use the virtual world, which is to say carefully a demarcated part of the real world, as an experimental domain free, or almost free, of the law that permeates the rest of our worlds. I thought Orin was heading there with his provocative paper, though that one begins with a more modest claim about criminal law (not all law) and virtual harms (no leakage into the real world). My debate point was that  legal intervention is to be expected ("law goes where we go") and that it would be hard to argue that law must absolutely stay away from things virtual ("virtual wrongs can be real wrongs"). But now I see that Orin was not aiming to argue, or at least not broadly argue, against LIV (legal intervention in virtual worlds), but rather is holding out for the narrow point that if there are examples where the wrong suffered is a purely virtual wrong, then there should be no real remedy. In his world, virtual and real, if my game character cheats and kills yours, then your remedy is with the game administrator and, if you are in the right, your character might be returned to its pre-wrong state -- in a wonderful imitation of the remedial norm we aspire to in the real world. We are left to debate pre-judgment interest.

Debate: LIV (Legal Intervention in Virtual Worlds)

Having predicted that law will follow activity (and complaints) into the virtual worlds, let me now respond to Orin Kerr and look for obvious places where even some libertarians might favor intervention, criminal and otherwise. Most of us think that fraud ought to generate government intervention, so what about fraud in the virtual world? I understand that when one cheats when playing poker or in calling fouls on the basketball court, the normal remedy is social disapproval and, eventually, removal from the game. Occasionally, the fraud is so severe that law comes into play because the fraud has so affected one's out-of-game wealth or physical safety.

Isn't all this likely to be true when one "plays" or lives part-time in virtual worlds? If A deletes much of B's existence in the virtual world, or A manipulates B in that world to such a degree that B's real world health and safety are at issue, why should criminal law be thought out of bounds? I think Orin's argument (we will find out shortly) might be that there will be too much of a chill on participation, but that is something we can take into account with our remedies; it is rarely if ever something that causes us to promise that there will be no criminal law intervention. I can be held accountable for things I do and say in a church (despite the chill problem), such as fraudulently inducing marriage or charitable contributions. I can be accountable for things I do and say in a classroom. And the same is true for the basketball court and for many other settings that might have been set aside as safe havens.

It is part of the growing pains of a field, I think, for early settlers to wish that it be kept pure and clear of outsiders. But it is inevitable that the logic and interest groups, good and bad, that brought about legal intervention in the old worlds will bring about similar intervention in the new.

Legal Intervention in Virtual Worlds (Blog Debate: Levmore on Kerr)

My reaction to Orin's interesting piece on keeping criminal law out of the virtual world(s) is largely pragmatic and positivist. Any area of activity that generates outcries (as will Second Life and other planets in the virtual world when they become more populated and when some inhabitants resort to hate speech, and other offenses to majoritarian sentiments) will generate regulation over libertarian objections. We can think of the virtual world as following on the heels of the securities markets, religions, and universities. In each of these domains a good case could have been (and often was) made that government-as-we-know-it ought to stay out and allow the internal rules of the domain to regulate its voluntary inhabitants. But in each of these areas, as more citizens opted in to these worlds, there was less of a sense that they had agreed to prevailing rules, more of a sense that those in control could misbehave and fail to regulate themselves appropriately and, eventually, occasional or (in the case of securities markets) frequent intervention and regulation by law, including criminal law, followed.