Volume 79, Number 5

November 2004

Property and Property Rules

Henry E. Smith

This Article builds on the literature generated by Calabresi and Melamed’s framework for protecting entitlements through property and liability rules. Pointing to the gap between academic commentators’ conclusions that liability rules are superior in most circumstances and the reality that property rules overwhelmingly predominate in the law, Professor Smith offers a theory of the advantages of property rules that is based on information costs. The starting point for this theory is the observation that assets are heterogeneous in ways that are economically significant but costly to identify and value; liability rules inevitably involve some need for an official to make such valuations. Professor Smith argues that the preference for liability rules rests on certain convenient but overly simple assumptions that elide the costs of producing information about assets and activities.

Second, Professor Smith explores the natural pairing between property rules and owners’ rights to exclude others from their property. The “exclusion strategy” for protecting property rights relies on simple on/off signals such as the boundary around a parcel of land to communicate rights and duties to the rest of the world. Within this protected zone, owners have open-ended choices of how to invest in or consume the asset. This Article shows how pairing property rules with an exclusion strategy has advantages that stem from saving information costs, deterring opportunism by potential takers, and discouraging owners from engaging in wasteful self-help.

Finally, this Article shows how the information-cost theory illuminates the connection between property rule protection and traditional notions such as residual claimancy and property in the sense of an in rem right to a thing.

Judicial Review of Agency Inaction: An Arbitrariness Approach

Lisa Schultz Bressman

This Article contends that the current law governing judicial review of agency inaction, though consistent with the prevailing theory of agency legitimacy, is inconsistent with the founding principles of the administrative state. The Supreme Court’s reluctance to allow judicial review of agency inaction reflects the popular view that agency decisionmaking should be subject foremost to the scrutiny of politically accountable officials. The difficulty is that even scholars who generally support this view of agency decisionmaking reject the Court’s treatment of agency inaction. Yet these scholars have failed to appreciate the reason. The reason is that the founding principles of the administrative state are dedicated not only to promoting political accountability, but also to preventing administrative arbitrariness–and reserve a role for judicial review toward that end. This Article shows that agency inaction raises a concern for administrative arbitrariness because it is susceptible to the same narrow influences that derail agency action from public purposes. Agency inaction that reflects such influences, though often rational from a political standpoint, nonetheless is arbitrary and objectionable from a democratic perspective.

This Article therefore suggests that courts eschew any special prohibitions on judicial review of agency inaction, and instead subject agency inaction to the same principles of judicial review that apply to agency action. It proposes changes to the two doctrines that most frequently block judicial review of agency inaction: nonreviewability and standing. Furthermore, it recommends that courts carve any exceptions to judicial review for agency inaction from established constitutional law principles. It argues that nonreviewability should be understood as an analogue to political question doctrine, precluding courts from policing conduct committed to the unfettered discretion of administrative officials. Similarly, it argues that standing should be understood as an analogue to non delegation doctrine, precluding Congress through citizen-suit provisions from effectively delegating policymaking power to private parties. More broadly, this Article argues that both nonreviewability and standing should be viewed as links to separation of powers doctrine, barring courts from hearing challenges to the generalized manner in which agencies perform their jobs. In offering these analogies, this Article credits the Supreme Court’s intuition that important constitutional values place some enforcement discretion beyond the reach of judicial review-even if Congress disagrees. But it recommends using established separation of powers principles to constrain this intuition from producing doctrines that subvert the prevention of arbitrary agency decisionmaking.


Consolidating Democracy Through Transitional Justice: Rwanda’s Gacaca Courts

Aneta Wierzynska

This Note asserts that the key to preventing reversion to violence in postconflict societies lies in the development of a civic culture among the citizenry. Civic culture is understood as the social internalization of democratic practices, which include political participation and public contestation. Accordingly, the field of transitional justice should include mechanisms that engage the members of postconflict societies directly in processes engendering civic behavior. To illustrate the foregoing thesis, this Note examines Rwanda’s traditional, community-based restorative justice institution–Gacaca–and demonstrates how it helps to promote participation and contestation. First, the Gacaca process encourages the Rwandese people to voice their concerns openly and to begin to question authority, thereby weakening the authoritarian government’s monopoly on power. Second, the Gacaca process channels the people’s discord through a peaceful dispute-resolution process rather than through violence, thus demonstrating the potential for democratic contestation to serve as an alternative to violent conflict.

Using Collective Interests to Ensure Human Rights: An Analysis of the Articles on State Responsibility

Margo Kaplan

This Note provides a critical analysis of the United Nations International Law Commission’s treatment of the legal interest in the Draft Articles on Responsibility of States for Internationally Wrongful Acts (Articles). It focuses on two decisions that the International Law Commission (ILC) made during the drafting process: 1) the decision to use a narrow definition of “injured state,” excluding states that suffer a breach of an obligation owed to them solely as members of the international community; and 2) the decision to replace a provision recognizing and regulating the practice of collective countermeasures with a savings clause that provides no guidance for the use of collective countermeasures, leaving the legality of such actions uncertain.

This Note argues that, although the ILC was correct to weigh the risks of allowing states broad discretion to act in the name of collective interests, the development of the law of state responsibility would have been better served had the ILC taken a more progressive approach to recognizing the interests of the international community in enforcing state responsibility. First, the ILC should have more broadly defined “injured state” to include states that suffer a breach of an obligation owed to them solely as members of the international community, but should also have limited the types of actions such states would be permitted to take in response to a breach. Second, the ILC should have adopted Special Rapporteur James Crawford’s proposal that the Articles specifically allow and regulate the practice of collective countermeasures in response to a gross and well-attested breach of certain fundamental obligations. This approach strikes a better balance between the potential value of collective countermeasures as a tool to help those without direct access to the international legal system and the risk that collective countermeasures will be abused by powerful states seeking to further their own interests.

The Equal Pay Act in the Courts: A De Facto White-Collar Exemption

Juliene James

The Equal Pay Act of 1963, though initially considered a victory for working women, has proven unsuccessful for women executives, administrative personnel, and professionals. This Note argues that plaintiffs bringing Equal Pay Act claims have faced courts whose interpretation of the law has effectively excluded women in higher level positions. Through an examination of the Act’s history and the history of similar exemptions in New Deal legislation, this Note argues that ideas about work, imported from early conceptions of managers, executives, and professionals in New Deal legislation, continue to influence courts’ interpretation of the Act. This Note offers two alternative solutions to this problem: The first prescription is to reexamine the history surrounding the Equal Pay Act with the aim of including workers who effectively have been excluded by judicial interpretation. The second is to reinstate in the Equal Pay Act the exemption as originally enacted so that the apparent inclusion of the these groups does not discourage legislative attempts to correct the problem.

Neither Icarus Nor Ostrich: State Constitutions as an Independent Source of Individual Rights

Robert K. Fitzpatrick

For more than three decades, observers have vigorously debated the desirability of judicial federalism–the practice of state courts interpreting their state constitutions to provide greater protections for individual rights than does the U.S. Constitution. This Note first discusses the recent history of judicial federalism and the theoretical debate concerning it. The Note then uses two current areas of legal struggle, same-sex marriage and government funding of religious education, to illustrate the effect on judicial federalism of two important structural limitations: the greater likelihood that state constitutions will be amended to overturn politically unpopular court decisions and the supremacy of federal law. The Note concludes that, although those structural features make it less likely that state courts will aggressively expand individual rights, they also serve to legitimate judicial federalism by alleviating its potentially negative aspects and mitigating the countermajoritarian difficulty that plagues federal constitutional decisions. Thus, although state courts engaging in judicial federalism generally will not attempt to fly too high as did the mythological Icarus, nor will they remain flightless like the ostrich. Rather, judicial federalism will continue to serve as a useful means for incremental legal change in a healthy, dynamic federal system.

Terminal 250: Federal Regulation of Airline Overbooking

Elliott Blanchard

Every year, hundreds of thousands of passengers arrive at their local airport to discover that their flight is overbooked. Unbeknownst to most travelers, their damages for the airlines’ breach of contract are governed by federal regulation. Since 1978, 14 C.F.R ยง 250.5 has set a statutory cap of four hundred dollars for all passengers bumped from domestic flights. In this Note, Elliott Blanchard examines the effects of this provision on passenger and airline behavior by applying modern contract theory to the problem of airline overbooking. He begins by examining the economic forces that led airlines to overbook flights and the subsequent federal government regulatory response in the 1970s. He observes that while a uniform system of compensation for all passengers made sense during the period of airline regulation, increased heterogeneity in both carriers and passengers now make such a system inefficient. While the market for airline travel has changed dramatically since the end of regulation, the statutory ceiling on damages has remained constant. The author argues that this cap undercompensates passengers for breach by the airlines, and rewards the carriers that overbook aggressively. Given the information asymmetries regarding the likelihood of being bumped, airlines have the opportunity to exploit passengers who cannot accurately discount an airline’s probability of performance. As a solution, the author suggests a repeal of the maximum damage amount coupled with increased disclosure of airline overbooking rates, which would encourage airlines to compete on performance as well as price.


“Wise Parents Do Not Hesitate to Learn from Their Children”: Interpreting State Constitutions in an Age of Global Jurisprudence

The Honorable Margaret H. Marshall

In this speech delivered for the annual William J. Brennan, Jr. Lecture on State Courts and Social Justice, Margaret H. Marshall, Chief Justice of the Supreme Judicial Court of Massachusetts, reflects upon the present need for comparative analysis in state and federal courts. The influence of the United States Constitution can now be seen globally in the widespread practice of guaranteeing individual rights by means of a written constitution enumerating individual rights, the interpretation of which is charged to an independent judiciary. But the influence runs in more than one direction. Chief Justice Marshall explores the global cross-pollination of constitutional jurisprudence. Noting that state constitutions often provide protection of individual freedoms beyond those guaranteed by the federal Constitution, as interpreted by the United States Supreme Court, Chief Justice Marshall suggests that state courts are optimally positioned to incorporate comparative analysis into their jurisprudence. She explores three particular substantive areas–personal autonomy, hate speech, and physical detention–as particularly appropriate for the exercise of comparative analysis involving the decisions of foreign and international constitutional courts.