Volume 91, Number 6

December 2016

From Promise to Form: How Contracting Online Changes Consumers

David A. Hoffman

I hypothesize that different experiences with online contracting have led some consumers to see contracts—both online and offline—in distinctive ways. Experimenting on a large, nationally representative sample, this paper provides evidence of age-based and experience-based differences in views of consumer contract formation and breach. I show that younger subjects who have entered into more online contracts are likelier than older ones to think that contracts can be formed online, that digital contracts are legitimate while oral contracts are not, and that contract law is unforgiving of breach.

I argue that such individual differences in views of contract formation and enforceability might lead firms to discriminate among consumers. There is some evidence that businesses are already using variance in views of contract to induce consumers to purchase goods they would not otherwise have. I conclude by suggesting how the law might respond to such behavior.

Hidden in Plain Sight: The Normative Source of Modern Tort Law

Mark A. Geistfeld

According to conventional wisdom, the normative source of modern tort law is mysterious. The reasons trace back to the state of nature. In a world without centralized government, individuals protected themselves by exacting talionic revenge—“an eye for an eye”—on their injurers. These customary norms of behavior were the source of the early common law, but tort scholars have assumed that they were merely a barbaric punitive practice without any relevance to the modern tort system. This field of the common law had to be normatively recreated, making it “modern.” The resultant body of tort law depends, as Oliver Wendell Holmes famously concluded, on “more or less definitely understood matters of policy.” The policies in question, however, have never been clearly identified. Courts and scholars continue to disagree about the norms that generate the behavioral obligations of modern tort law.

The normative source of modern tort law has been hidden in plain sight because of this widely held but mistaken understanding of legal history. Contrary to conventional wisdom, the state of nature was governed by a reciprocity norm of equitable balance that has survived the evolving demands of the modern tort system. In cases of accidental harm, the reciprocity norm often took the form of a compensatory obligation requiring “the value of an eye for an eye.” This norm was initially adopted and then further developed by the early common law. Courts subsequently invoked the reciprocity norm in the late nineteenth and early twentieth centuries to justify rules of negligence and strict liability. Once one looks, the importance of reciprocity is obvious.

Reciprocity, in the basic sense of “treating others like they treat you,” is a metanorm that individuals use to identify and enforce more particularized behavioral obligations in a wide variety of social interactions. Reciprocity attains equitable balance in tort cases through a series of behavioral and compensatory obligations corresponding to the modern rules of negligence and strict liability. Given the ongoing, pervasive influence of reciprocity, it readily provides the type of normative judgment that jurors must exercise when determining the behavioral requirements of reasonable care in a negligence case. Reciprocity supplies a normative practice that is distinct to tort law, defining a behavioral paradigm that normatively demarcates torts as a substantive field of the common law.

But even though tort law is distinctively defined by the paradigm of compensatory reciprocity, this normative practice does not fully justify tort law. Reciprocity is a behavioral norm. Why should the legal system enforce the norm? Must it always do so? These questions must be resolved with a substantive rationale for tort law, not with a behavioral norm that is enforced by the law.

By enforcing the behavioral obligations of reciprocity, the tort system engages in a normative practice that can be justified by the liberal egalitarian principle that each person has an equal right to autonomy or self-determination, making each responsible for the costs of his or her autonomous choices. Liberal egalitarianism is the only principle of substantive equality that can justify the tort rules that give different treatment to different types of nonreciprocal behaviors. Far from being a barbaric relic of the past, the reciprocity norm is enforced by tort law in a manner that clearly reveals the substantive rationale for this field of the common law.

Fee Simple Obsolete

Lee Anne Fennell

Urbanization has dramatically altered the way in which land generates and forfeits value. The dominant economic significance of patterns of land use and the opportunity costs of foregone complementarities have made the capacity to reconfigure urban property essential. Yet the architecture of our workhorse tenure form—the fee simple—is ill-suited to meet these challenges. The fee simple grants a perpetual monopoly on a piece of physical space—an ideal strategy when temporal spillovers loom large, interdependence among parcels is low, most value is produced within the four corners of the property, and cross-boundary externalities come in forms that governance strategies can readily reach. But times have changed. Categories of externalities that were once properly ignored by the fee simple have become too important to continue neglecting. This paper argues for alternative tenure forms that would move away from the endless duration and physical rootedness of the fee simple.


Cost, Accuracy, and Subjective Fairness in Legal Information Technology: A Response to Technological Due Process Critics

Jay Thornton

The United States spends substantially more as a percentage of GDP on legal services than most other countries. Simultaneously, various indicators suggest this outsized spending does not result in public perceptions of greater fairness or justice. While the digital automation of legal work offers the potential to help address this problematic paradigm, the legal academy’s reception of automation in law has been critical. This Note responds to these criticisms by showing the demonstrable objective and subjective fairness benefits that legal automation can achieve—all while reducing costs.

Due Process Disestablishment: Why Lawrence v. Texas is a First Amendment Case

Charles B. Straut

Much work has gone into making sense of Justice Kennedy’s famously unconventional use of the rational basis test in Lawrence v. Texas. But why did invalidating state sodomy bans require any doctrinal innovation? Shouldn’t Lawrence have been an easy case under already-existing law? After all, legislation must serve a secular purpose to meet the Establishment Clause test laid out in Lemon v. Kurtzman, and the bans had no rationale but a pan-Abrahamic homosexuality taboo. So hadn’t the bans been unconstitutional since Lemon—that is, some thirty years before Lawrence?

Until Lawrence, there was an anomaly at the heart of the Lemon test: Courts took morality enforcement for granted as a secular purpose, irrespective of whether that morality had any nonreligious rationale. This prevented the Lemon test from reaching one of the areas that needed it most: so-called “morals legislation.” Hence Lawrence is in effect an Establishment Clause case despite purporting to sound in due process. For the rule of decision it applied in invalidating the bans for lack of a secular purpose is none other than the familiar first prong of the Lemon test: Legislation must do more than codify creed.

In reaffirming that religious belief never suffices as a basis for legislation, Lawrence gave Lemon the breadth it always should have had. When it applied the secular purpose requirement to morals legislation, Lawrence vindicated the cultural choice implicit in the First Amendment’s nonestablishment rule—our precommitment to a legal system grounded in reasons that are open to all Americans.

Administrative Actavis

Monica L. Smith

The cost of prescription drugs, a function of the nexus of patent law and antitrust law, has recently been thrust into the spotlight. In the shadow of the Federal Trade Commission’s vigorous challenges to anticompetitive agreements between branded manufacturers and their potential generic competitors, a new player entered the administrative patent invalidity arena—noncompetitors, such as hedge fund managers, who, despite their reputation for seeking profit at all costs, asserted a seemingly puzzling altruistic interest in invalidating certain patents that prevent generic competitors from entering the market. In light of “abuse of process” accusations and calls for sanctions, this Note suggests that corporate law may facilitate an understanding of the role of noncompetitors in patent invalidation. Using the corporate law phenomenon of greenmail as an analogy, this Note argues that noncompetitors may actually facilitate competition and, as such, should be permitted to continue filing administrative patent challenges.

Anticompetitive Use of Administrative Trials in Bargaining Over Patent Rights

Susan Navarro Smelcer

In response to widespread concerns about the extent to which “trolls” distort the patent process and other deficiencies in the patent system, Congress created two new administrative trial processes by which a third party may challenge the validity of a patent in a more streamlined and less costly way than through a civil trial. Unfortunately, the very features that made these administrative quasi-judicial proceedings efficient also make them ripe for anticompetitive abuse. This behavior is especially problematic when it comes to bargaining over licenses for patents recognized as a “standard” or deemed to be “essential” to a particular industry. In this context, instituting administrative trials to determine patent validity may actually create an inequality in bargaining strength that allows the potential licensee to extract rents from the patent holder—especially if that licensee possesses market power.

This Note explores the source and nature of these anticompetitive harms and recognizes that, as currently applied by the courts, antitrust law cannot be used to reach these abuses. Noerr-Pennington immunity shields firms from exposure to antitrust liability with respect to most government interactions, with only narrow exceptions for sham petitioning and litigating activity. In the patent context, these exceptions are far too narrow and make antitrust liability functionally unobtainable. In particular, this Note argues that the “sham litigation” exception to Noerr-Pennington should be expanded to encompass a wider range of litigation tactics—including instituting an administrative proceeding—to deter anticompetitive behavior that distorts both bargaining over patent licenses and the market more broadly.

Encouraging Climate Adaptation Through Reform of Federal Crop Insurance Subsidies

Ann Jaworski

Climate change is expected to have immensely detrimental effects on agriculture. Changing climate patterns will also make many locations inhospitable to the crops currently grown there. In order to mitigate the effects of climate change on agriculture, farmers should adapt by changing the mix of crops grown in a given location. Federal crop insurance masks incentives American farmers would otherwise have to adapt to climate change through crop choice. Large premium subsidies—with most insured farmers paying less than half of the actuarially sound premium—are a huge part of this problem. This Note explains the connection between crop choice and climate change. It then analyzes existing proposals for reforming the crop insurance system to better incentivize adaptation to climate change, and highlights some political and practical obstacles to doing so. Finally, it argues that a tiered subsidy system—in which crops at high risk of failure due to location-specific climate risks would receive lower subsidies—could be a feasible, incremental solution to the problem.