The University of Chicago Law School Faculty Blog

Apple v. Samsung: What Are Patents Good For?

2012-08-26T19:33:50-05:00

Late Friday afternoon, Apple won a dramatic $1 billion-plus patent verdict against Samsung. The verdict has been described, by Samsung to be sure but also by many commentators, as anti-consumer, meaning presumably that prices will be higher and consumers will have access to fewer innovative products. That of course is a particularly after-the-fact perspective and one that ignores the basic design of the patent system. Pick your favorite “good” patent—meaning one that in your heart of hearts you think is entitled to be enforced against infringers (and if you don’t have such a patent, then that is a very different discussion and you can probably stop reading)—at the point that our good patent is enforced, we are blocking consumers from a product that some firm would like to produce and that consumers are eager to buy.

When we enforce a patent, we are almost certainly vindicating the market power that the patent system makes available to successful inventions. Blocking products that producers would like to sell and that consumers would like to buy is the flipside of providing would-be inventors with the incentives to create great innovations in the first place. Samsung and its customers don’t have any interest in enforcing Apple’s patents.

I am hard-pressed as to know how to think about patents otherwise. The alternative is almost a teacher’s gold-star approach to patents. Today’s New York Times quotes Josh Lerner of Harvard Business School: “It is hard not to see all the patent-buying and patent lawsuits as a distortion of the role of patents. They are supposed to be an incentive for innovation.” Josh is both thoughtful and knowledgeable, but I don’t get this at all. An incentive how and to do what exactly? To have the U.S. Patent and Trademark Office award an inventor a gold star that she can post on the wall at home and admire as a symbol of success, just like you did in second grade? The only way to use a patent is to enforce it against someone else or to at least be able to threaten to do so, so that they will license rights from you. You don’t need a patent to practice the invention: You can do that on your own, just as you do with trade secrets. The point of the patent is to be able to enforce it against others to stop them from using the invention without your consent. We could run a different patent system with lots of compulsory licensing and ratemaking hearings, but that isn’t today’s system in the U.S.

Last Thursday, Nilay Patel and his colleagues at The Verge provided a very nice breakdown of the issues facing the jury with links to the underlying utility patent, design patent and trade dress claims being asserted by Apple, as well as the claims being asserted by Samsung. As we multiply patents, Samsung devices and Samsung companies, we end up with a complex, check-the-box jury form that asked the jury to reach a host of decisions. As Samsung put it in its motion seeking thirty minutes to review the verdict before the jury was dismissed: “[T]he verdict form in this complex case necessarily spans 20 pages and requires unanimous answers to more than 500 discrete questions across 5 different legal displaces.” I think most observers were surprised by the speed at which the jury was able to reach a conclusion, but conclude they did in a one-sided result in favor of Apple.

The hostility over the verdict directed towards Apple reflects a broader unhappiness with the patent system. With the emergence of non-practicing entities—NPEs or, less charitably, patent trolls—the tools for enforcing patents have changed. But whatever we think of those developments, they have little to do with the Apple/Samsung case, as both Apple and Samsung build and sell their products.

The charge is more basic: we have too many patents, as my colleague (and former boss) Judge Richard Posner argued recently in The Atlantic. (And for a response, see another of my colleagues, Richard Epstein, in Newsweek.) There are perhaps three popular flavors of the too-many-patents claim. The first is about patent thickets and frustrated innovation. Many small patents are granted and an actual innovative product in the area needs access to all of those patents. One holdout means no product or, in the alternative, a firm builds a product knowing that it faces the risk that a claim will emerge later for a good chunk of the profits. The great danger of these claims of course is that no one ever shows up to try to share the costs of failed products. The patents are revealed only after the fact when the product has proven itself in the marketplace and a large pot of money has been created. Whatever we think of the patent thicket idea generally, it doesn’t seem to have much bite in Apple v. Samsung.

The second version of too-many-patents is a claim about innovation and incremental incentives. Patents are supposed to induce R&D and we reward that extra investment with a property right. But if the relevant innovation would be found anyhow through the normal activities of the firm, the patent lure isn’t inducing anything and we then are handing out property rights with all of the corresponding market power harms for nothing.

The third version of too-many-patents idea is about how innovation is rewarded and is another version of the incremental incentives claim. Apple has become the most valuable company on the planet through its innovations. We might think that carrot enough even without the further benefits of patent protection for its underlying innovations. Try this: if we had said to Steve Jobs and Jonathan Ive, “your new designs will create the most valuable firm on the planet but we won’t give you property rights in them, so other firms will be able to piggyback on those ideas rapidly, will you still move forward?” I assume that we think that the answer to that is yes.

So we have two versions of the incremental incentives claim, one that the firm would have found the invention anyhow and the second that the invention’s reward was already sufficiently large that we didn’t need to add more to it with an additional property right. We could run the U.S. patent system to try to take into account those ideas, but today we don’t. Whatever the merits of the incremental incentives notion, it doesn’t have a role to play in Apple/Samsung.

I haven’t tried to sort the individual patents at stake in the Apple case. There was a great deal of evidence presented in the case and I wasn’t in the courtroom. Samsung attempted to characterize Apple’s design claims as seeking a patent on rounded corners. As that suggests, it can be easy to poke fun at design claims, but the reality is that we have run a system with design patents for a very long time. The UK’s Intellectual Property Office traces design protection there back to a 1787 act, while U.S. protection for designs started with an 1842 statute.

If your view of Apple’s patents is that Apple has pulled a fast one on the PTO by sneaking through illegitimate claims and effectively privatizing ideas that would otherwise be in the public domain, then you undoubtedly regard Apple’s lawsuit as defective from the get-go. But that clearly wasn’t the view of the jury—a hometown jury to be sure—and even if the jury may have stumbled some in answering the 500 questions posed to it, there is a core analysis in Apple’s favor that seems straightforward.

The simple version of the big picture is that Apple has actually been quite innovative and it wouldn’t be surprising if that innovativeness was captured in a variety of patents. I think that would be the case in today’s world, in which we seem to grant lots of patents on small pieces or in a different world in which we only granted patents in larger sizes. Apple seems to have been meaningfully innovative in the sense that customers like their products and competitors want to duplicate them. That innovativeness is a fusion of its touch interface and the aesthetics of design in which Apple has embodied that interface. That actually tracks the utility and design patents in the case and if we are going to run a system with patents, it wouldn’t be at all surprising that Apple would have patents connected to these innovations.

I don’t know exactly how we count interfaces. Do we start with the C prompt and menus and then move to the graphical user interface? Are the varieties of touch—from the original iPod’s click wheel to where we are today—the next step? But however we do that, Apple seems to have driven the touch innovation that is sweeping how we interact with laptop computers, tablet and mobile phones and, I suspect, that is what the jury responded to in the case.

I find lots of ironies here. Patent trolls are reviled: typically, they don’t build products and just enforce patents earned by others. There is a great deal more to be said in defense of that—about the virtues of separating invention, production and enforcement—and in the way that NPEs provide exit markets for inventors, but none of that is at stake in Apple/Samsung. There are firms that seem to be active licensors of patents in the smartphone space, such as Microsoft. But, one guesses, that is driven by the fact that Microsoft has not been an important player, to date, in smartphone platforms or handsets themselves. If you can’t monetize from selling the product, sell IP inputs, as Microsoft has done.

In contrast, Apple is the hardcore vertically integrated firm, inventing, producing and enforcing its IP rights against another very successful producing firm. We can undertake to revamp the patent system, and that could be within-patent reforms about the balance of utility patents and design patents or larger scale reforms that focus on the incremental incentives question, but given the system we have today, it isn’t at all surprising that an innovative firm like Apple holds patents that, by design, make it possible for Apple to block sales by competitors to eager customers. That is, after all, the point of the patent system in the first place.

Politics, Copyright and the First-Amendment Commons

2012-02-21T21:07:15-06:00

On the eve of the Republican primary in Florida, the Romney campaign started running a new television ad called “History Lesson.” Romney was coming off Newt Gingrich’s double-digit win in South Carolina and the momentum in the campaign for the 2012 Republican seemed to be shifting, perhaps decisively, in Gingrich’s favor. With only ten days between primaries, the Romney campaign needed a new, hard-hitting approach and it needed to act quickly.

The new ad was a key part of that. The thirty-second ad was quite simple and straightforward. The last couple of seconds were the obligatory “I’m Mitt Romney and I approve this message” while the first twenty- seven seconds were just a video clip from the NBC Nightly News broadcast of January 21, 1997. The familiar voice but much-younger face of anchor Tom Brokaw came up and Brokaw opened that evening’s newcast with the lead story of the day: then Speaker of the House Newt Gingrich had been found guilty of ethics violations by the House of Representatives in a vote of 395-28 and had been ordered to pay a $300,000 fine in connection with the violations. (You can read the front page story of the January 22, 1997 Washington Post here.)

There can be little doubt about why the Romney campaign chose to run the clip from the Nightly News. The campaign wanted to hit Gingrich with what they say as a strong charge against him and they wanted to avoid accusations that they had cherry-picked the facts for the ad. What better way to do that than to use the expression of a highly-regarded, wholly independent source, such as Tom Brokaw and the Nightly News.

Brokaw and NBC saw the matter differently. As was widely reported, on January 28, 2012, three days before the Florida primary, NBC sent a letter to the Rommey campaign asking the campaign to cease using NBC news material in Romney campaign ads. NBC had made similar requests of other campaigns that had used material without first seeking permission from NBC. Brokaw himself was quoted as saying that “I am extremely uncomfortable with the extended use of my personal image in this political ad” as Brokaw did “not want my role as a journalist compromised for political gain by any campaign.”

The letter istelf (a copy is available at Politico.com) is short and to the point. The material used in the Romney ad was under copyright and the Romney campaign was using the material without permission. The letter further suggested that the way in which the material was being used suggested that NBC had consented to its use. And beyond copyright, NBC complained that “this use of the voice of Mr. Brokaw and the NBC News name exploits him and the jouralistic credibility of the NBC News.”

We start with legal issues and then turned to bigger picture considerations. On copyright, the core structure of copyright’s fair use is use without permission. To complain of use without permission is simply to complain about how copyright is organized, which is fine, but when we think of what scope fair use should have the use by the Romney campaign seems as fair as it can get. It is apparent to all, I think, that the reason the campaign used the materials was precisely that NBC and other leading news organizations are seen as having journalistic credibility. The Romney campaign wanted to offer up an independent framing of the 1997 ethics charge, not one that was somehow seen as concocted by the Romney campaign. A 15-year old news clip was the perfect was to do this. And, of course, the age of the clip meant that no one could seriously think that NBC or Brokaw were, in 1997, endorsing the 2012 Romney campaign.

Beyond this, the trump card that NBC and Brokaw sought to play would seem to mean that professional video representations of historical facts would simply be taken off of the table for political campaigns. It is hard to see how NBC and similar organizations could ever consent to use, given that consent itself would seem to be inconsistent with the neutral role of news organizations. Far better to have the fair use regime, where there is no consent and no sense of endorsement by a news organiation of one campaign over another.

Then we get to the bigger picture on this. I have this sense, with more frequency than I would like, that major media organizations think of the First Amendment as something that runs in their favor but never against them. A First Amendment for me but not for thee. It would have been nice if NBC and Mr. Brokaw had seen this as an opportunity to invest in the First Amendment ecosystem. That would have meant acknowledging the legitimacy of the use of the video clip by the Romney campaign and the need for such use in a vibrant democracy. Instead, NBC saw its interest in the narrowest terms possible and threw away a great opportunity to demonstrate how the First Amendment should work in a robust democracy.

Video: Law School Faculty on United States v. Jones

2012-01-23T13:32:38-06:00

Today the Supreme Court handed down a decision in United States v. Jones which held that attaching a GPS device to a vehicle and then using the device to monitor the vehicle’s movements constitutes a search under the Fourth Amendment. In November, after the Court heard arguments, we interviewed several faculty members about the case. Care to see how their predictions turned out? See the video embedded below.

Remembering Judge Terence Evans

2011-08-11T16:18:38-05:00

One Sunday morning in the fall of my third year of law school, Judge Terence Evans called to offer me a clerkship in his chambers for the following year. A judge on the 7th Circuit U.S. Court of Appeals, Evans was calling from his office in Milwaukee, but he got interrupted and had to put me on hold. After coming back on the line, he explained that his wife had called to remind him to pick up beer for their cookout that afternoon. Here, plainly, was one federal judge who didn't take himself too seriously.

Judge Evans, who had recently taken senior status, died last night at the age of 71. He had been in good health, playing golf (his passion) just a few weeks ago, but declined rapidly after being diagnosed with a chronic lung disease.

Judge Evans was a story teller, but even more so, a man who inspired stories that others would tell about him with affection. He was a great favorite of clerks and staff attorneys in the 7th Circuit's Chicago offices, always quick with a wry smile, a quip, or an opinion about sports. He was a Milwaukee guy through and through, a widely known and well-liked figure in the city where he had grown up, gone to college and law school (both at Marquette), practiced law, and risen through the state and federal judiciaries. The one all-office lunch we had during my year with him took place at a divey Mexican joint he was fond of for some reason.

He was a private and modest man, not the sort of judge who organized reunions for former clerks and expected Christmas cards and wedding invitations. But he was informal and someone, as Chief Judge Frank Easterbrook remembered him, with a healthy sense of joie de vivre. He dressed well and had an elegant mane of white hair. Once I sent him an email letting him know his barber Katie had called to confirm an appointment. He wrote back: "I call her my 'stylist,' not my 'barber.' I do have some vanity!" He was a huge fan of Larry David and, hoping his appreciation would rub off, would leave selections on my desk from his prized collection of Curb Your Enthusiasm DVDs.

Judge Evans loved to lace his opinions with whimsy. In a First Amendment case involving the University of Illinois mascot Chief Illiniwek, he offered the reader a "detour" (for a substantial chunk of the opinion) "for a brief look at college nicknames and their embodiment as mascots," and awarded Best College Nickname to the University of California-Santa Cruz. ("Imagine," he wrote, "the fear in the hearts of opponents who travel there to face the imaginatively named 'Banana Slugs.'") In a decision refusing mercy to an attorney who had missed a crucial filing by one day, Evans began the opinion by quoting from Dinah Washington: “What a diff'rence a day makes ... twenty-four little hours.” The 2005 opinion in which he mentioned rapper Ludacris and explained the proper use of the word "ho" became legendary. (Once, though, when I tried to work in some similar witticism at the end of an opinion draft, he told me that the pop culture references made it into the Federal Reports only if he thought them up.)

Judges on the Seventh Circuit mostly fall into two groups: former academics and former district judges. Evans was the latter. His judicial philosophy, to the extent he had one, was pragmatic. He liked to hire clerks with journalism backgrounds because he favored plain writing and clear legal explanations. On the appellate court, he retained the instincts of the district judge he had been for many years. He was inclined to defer to district judges when doing so was reasonable, and he liked to give them little shout-outs in his opinions when he thought they had gotten something right. He could be privately impatient with colleagues (or clerks) whom he thought were getting too deep into the weeds of legal theory. He was universally liked by lawyers who practice regularly at the 7th Circuit, who appreciated his civility toward them.

Evans was a moderate Democrat, no ideologue but conscious and proud of his working-class roots. The last opinion I drafted for him was a rare dissent in a case against a credit card company that imposed fees in a manner that seemed calculated to assure the poor cardholder would never get out of debt. Judge Evans protested the court's dismissal of the plaintiff's claims, which he saw as a victory for a greedy corporation over the little guy. The other two panel judges were Joel Flaum and William Bauer, both of whom Evans loved and admired. So there was no acrimony (there never could have been with Judge Evans, or any of those three), only some good-natured joshing in the hallway after the judges' private conference.

Steve Sanders

The 14th Amendment Meets the Bankruptcy Code

2011-07-29T16:45:34-05:00

The danger of blogging—especially late on Friday in the Summer—is that it is too easy to jump in on issues that you haven’t considered fully, but I guess that is one of its joys as well.

As an outsider to constitutional law, I have found the discussion of the 14th amendment a tad odd. Section 4 of the 14th Amendment provides that “[t]he validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any state shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.”

What does it mean that valid debts authorized by law “shall not be questioned?” I know what we would say if we were doing ordinary bankruptcy law. One of the key mechanical steps in an ordinary bankruptcy is what we call the allowance and disallowance of claims. A person who wants to collect from a person or firm in bankruptcy files a proof of claim with the bankruptcy court. The bankruptcy judge in turn subject to statutory standards has to decide whether that claim can be allowed or disallowed. The statute provides a number of bases for disallowing particular claims.

Allowance of a claim in bankruptcy just gets you in the door, just gets you the right to stand in line and participate in the case. It tells you nothing about priority of payment—that is your ability to get paid before someone else—and tells you nothing about the timing of payment. The original terms of a debt—legitimately owed debts—are changed all of the time in bankruptcy, indeed that is the point of the proceeding.

So what does it mean when Section 4 of the 14th Amendment says that debts cannot be questioned? I know with a bankruptcy lawyer would say: this is the equivalent of an automatic allowance provision. It means that a number of reasons that a debtor might have to challenge a particular debt cannot be asserted. But that says nothing—zero, nada, zilch—about whether a debtor can default on that debt or choose to prioritize one debt over another. That fact that a debt cannot be disallowed says nothing about default or timing of payment. And default and prioritization are the normal stuff of failing firms. They owe many legitimate debts and they can’t pay them all. The fact that your debt is legitimate—cannot be questioned—doesn’t begin to tell you for an ordinary debtor that you will get paid on time or that there will be no default.

Is FICO-Scoring Patients Therapeutic?

2011-07-13T17:05:00-05:00

The Fair Isaac Corporation recently announced the launch of FICO Medication Adherence Scores. FICO scores, which are famous for predicting whether an individual will become delinquent on a home or car loan, for the first time will be used to assess which patients are likely to take the drugs their doctors prescribe.

The FICO Adherence Score is an algorithm that FICO developed based on the close study of almost 600,000 patients suffering from asthma, diabetes, and heart disease. FICO identified which patients were likely to have their prescriptions filled and re-filled. FICO then used data mining techniques to identify correlations between prescription filling and consumer information already in its credit history databases. This information, combined with data gleaned from a patient’s own history of getting prescriptions filled, could predict patient behavior. As it turns out, individuals who rent their homes, live alone, don’t own cars, or have started a new job recently are less likely to follow their doctors’ advice. The risk factors that predict a loan default and a failure to take Advair are not identical, but there is evidently some overlap.

Research cited by Fair Isaac suggests that noncompliance with drug treatment regimens cost the American health care system some $250 to $300 billion per year, approximately thirteen percent of total health care spending. Despite the significant health benefits from a system that might help doctors and insurers identify noncompliant patients who would benefit from reminders to take their medicine and follow-up nurse visits, the Medical Adherence Scores sound frighteningly Orwellian and Kafkaesque. Critics raise concerns about patient privacy and the unreliability of FICO scoring in general. They rightly note that patients are people, not automatons, which means even the best algorithms will make mistakes. Patients without cars or roommates have wondered whether they might face discriminatory treatment and whether the Medical Adherence Scores would be used to set insurance premiums. (Patients who do not get their prescriptions filled regularly may actually see their health insurance premiums decline, at least in the short run, but they could see their life insurance premiums rise.)

Alas, it isn't appropriate for FICO's critics to dismiss Medical Adherence Scores by comparing our new reality to a perfectly virtuous world. A ban on the use of FICO scoring in medicine wouldn’t eliminate a common dilemma: The best treatment plan for, say, congestive heart failure, may require vigilant follow-through by the patient. But if such compliance is unlikely, the optimal treatment may be another therapy altogether. Organ transplants represent a particularly stark choice. Transplants have great potential to improve the lives of recipients, but a lack of follow-through by a patient and her caregivers may expose the recipient to life-threatening risks and result in the waste of a very precious resource that could have saved another person’s life.

A physician must have some criteria for deciding which type of patient she is treating. The patients themselves are not always reliable sources for this screening. Few patients will admit to their doctors (or to themselves) that they are unlikely to follow through.

When physicians do not know a patient well, they sometimes rely on proxies that are more distasteful than car ownership in assessing the odds of follow-through. Some physicians rely on the equivalent of old wives’ tales. But as I detail in chapter eight of my brand new book, Information and Exclusion, recent research on health disparities suggests that junk science decisionmaking may be the least of our worries. One study in the American Journal of Transplantation identified a greater propensity among nephrologists to refer children from affluent families to transplant surgeons. The physicians assumed that wealthier parents would be more likely to comply with rigorous postoperative recovery protocols. A separate study in Social Science & Medicine found that the physicians surveyed viewed African Americans as less likely to comply with treatment regimens. Such racial profiling by physicians may contribute to disturbing phenomena like doctors’ tendency to prescribe narcotic pain medication far more readily to Caucasians than African Americans.

Physicians are not going to treat all patients equally, and maybe that is for the best. We want compliant and noncompliant patients alike to get the respective treatments that will be most therapeutic. But deciding who fits into which group can be a daunting challenge, particularly for specialists with large practices and a population of patients who have bounced from doctor to doctor. To be sure, FICO’s Medical Adherence Scores are imperfect. We know that many errors in consumer credit databases go undiscovered, and getting even acknowledged errors fixed can require substantial perseverance. But at least FICO’s predictions will be based on hard data that patients can access, and the law can ensure that factors like race and national origin are not used as inputs into the algorithm.

Fair Isaac Corporation is the first entrant into this market, but they should face competitive pressures to improve the accuracy of their scoring as time passes and patient behavior patterns change. The biases that some physicians rely on are stubborn, unscientific, difficult to detect, and far more disturbing alternatives for predicting patients’ behavior.

Obama and same-sex marriage: the lawyerly straddle continues

2011-06-24T14:24:53-05:00

President Obama's remarks last night to a gay/lesbian fundraising event must have disappointed his supporters who have grown tired of straddling and rhetorical games on the subject of marriage equality from someone who once called himself a "fierce advocate" for gays and lesbians.

To be sure, this administration has accomplished far more to advance gay and lesbian equality than any other: the repeal of Don't Ask, Don't Tell; the bold decision not to defend the federal Defense of Marriage Act (DOMA); a federal mandate that hospitals allow visitation rights to gay partners; passage of a new hate crimes law. Much of this policy and legal work has been creative and courageous.

And yet, speaking in New York, where gays and other progressives are on the one-yard line of legalizing same-sex marriage, Obama could not bring himself to join or even clearly endorse their fight. The best he could do was praise marriage supporters for advancing "debate" and "deliberation about what it means here in New York to treat people fairly in the eyes of the law." Grappling with issues that are "tough" and "emotional" will, he said, help assure that "slowly but surely we find the way forward."

This sort of circumlocution is one of the skilled speechwriter's dark arts: avoiding candor and commitment while bathing your audience in seemingly empathetic platitudes. To say you believe your friends are "doing exactly what democracies are supposed to do" is not the same as declaring your solidarity with the moral purposes of their struggle. It is a way of flattering them because you hope they'll still like you (and donate time and money to your campaign) while also staying above the fray.

The president said he "believe[s] that gay couples deserve the same legal rights as every other couple in this country." But this is lawyerly precision in the service of straddling. He would not say that gay couples deserve "marriage." Obama wants to "keep on fighting until the law no longer treats committed partners who’ve been together for decades like they’re strangers." But this is more political circumlocution. What gays want is simpler but more profound: for their relationships to be regarded as equivalent in the eyes of the law to those of straight people. There is a subtle but important difference between having "the same legal rights" as someone else and having actual equality.

Civil unions, the vehicle Obama supports to provide those "same legal rights," are not the same as marriage. As one commentator has written:

There are legal reasons why they're not equal -- marriage is recognized in every state and indeed every country, while civil unions aren't; so the rights and responsibilities don't necessarily travel with you when you leave the state that granted them.

There are emotional reasons -- marriage is an institution/ ritual/ relationship that has existed for thousands of years, one that has tremendous resonance in our culture in a way that civil unions simply don't. And there are moral reasons -- as history has born out, separate but equal is pretty much by definition not equal.

And as David Buckel of Lamdba Legal writes:

For people who would choose to marry, anything other than marriage has to be explained. Only the word married conveys the universally understood meaning applicable to many of our families — a meaning unmatched by any other word. By imposing civil unions and barring marriage, even if the two statuses offer the same benefits and obligations on paper except for the powerful “M” word, the government is forcing same-sex couples to explain the difference in theirdaily lives. They lose the respect and dignity they believe their commitment deserves.

Obama's clearest, most unequivocal statement on marriage remains the views he expressed to pop preacher Rick Warren during the 2008 campaign: “I believe that marriage is the union between a man and a woman. Now, for me as a Christian…it is also a sacred union. God’s in the mix.” If this remains Obama's true belief, as opposed to another posture, then ironically he may have more political and moral kinship than he might like to admit with those who wrote and pushed through DOMA in 1996. DOMA's sponsors asserted that among the purposes of their legislation was "defending and nurturing the institution of traditional, heterosexual marriage," because such family configurations had been "ordained by God."

Let's be candid. Obama faces a nihilistic political opposition that has demonstrated it will say anything in order to demean and defeat him, whether true or not. Does he really think that if he technically does not endorse same-sex marriage, the people who fight against gay marriage will keep an open mind about voting for him? Or, at a time when a majority of Americans now support marriage equality, does he really believe that this kind of political tapdance will be alluring to "moderates"?

Obama reminded his audience Thursday night that he had taught constitutional law (it was at this law school, no less), and that this experience led him to conclude that DOMA was unconstitutional. But opposing DOMA -- which concerns whether the federal government should merely recognize extant same-sex marriages that have been created by the states -- is not the same thing as declaring that you believe it is legally just and morally salubrious for states to provide equal marriage. As a former con law teacher, Obama also should know that when people are seeking full legal equality in a civil institution, "separate but equal" compromises--the kind of compromise he continues to endorse regarding same-sex marriage--have been rejected since Brown v. Board of Education more than half a century ago as not only unconstitutional, but illusory and cynical as well.

Steve Sanders

The Rage Over Conditional Scholarships

2011-05-16T15:32:45-05:00

The law school world has been abuzz since an article in the Sunday NY Times, two weeks ago, exposed the practice of recruiting new law students with financial aid, but conditioning the continuation of scholarships on good grades. Students were said to overestimate their chances of obtaining these grades, and then struggling with the financial burden of law school. A “smoking gun” was the fact that, given law schools’ grading curves, a substantial percentage of scholarship recipients could not possibly obtain the required grades. The article probably overestimated the number of law schools with such policies, but the issue is interesting, and there certainly are law schools where every scholarship is conditional on future grades – that only half the class or less could obtain. Admissions deans around the country now report receiving inquiries from lawyers involved in the ABA and from other organizations looking to define new rules, or perhaps best practices.

There is no need to run through the obvious libertarian response that prospective students, and especially the subset offered scholarships, are smart consumers who can and do understand exactly what is being offered. After-the-fact disappointment should not always translate into before–the-fact-regulation, especially when it is perfectly rational for some or many students to accept the offers sent their way. Incidentally, or by way of disclosure, I am fortunate enough to be at a law school that does not put this pressure on scholarship recipients (more on that, and the claim of good fortune in a minute), so I have no direct reason to favor or disfavor the current practice.

There are, however, at least two points missing from the current news coverage. The first concerns the strategy of schools that engage in the criticized plan. Imagine an elite law school that offers $x/year for three years to an applicant, though the x will vary according to the student’s need and the school’s own calculation of its need and its competition. Schools are aware of the US News rankings and the impact of inducing high-number applicants to attend. Occasionally, schools offer $y for one year, figuring that summer jobs and other things might help pay for later years., but three-year scholarships are common at elite law schools. Loans are, of course, also in the picture. But what about a school, often not a super-elite and well-endowed one, that offers $x per year, conditional on a 3.2 GPA? Put bluntly, the student will lose the scholarship if the student is not near the top of the class. My interpretation of this strategy is that it does not so much set out to fool customers as it tries to deal with the problem of transfers. The strategy might as well be described as follows: We will discount your first year tuition by $x, and then if you earn good grades you will be tempted to transfer to a higher ranked school. (Some schools lose a significant percentage of their top students this way.) We want to keep you for your second and third years, and so we will offer you a scholarship to stay with us rather than to transfer away. But instead of being so crass, and waiting for you to threaten to transfer, we will save transaction costs for both of us, and promise a scholarship if you have the sort of grades that facilitates transferring. Put this way, I think the strategy much less likely to raise objections.

Second, this interpretation of what is going on in the market explains, if that is the right word, why the elite schools do not offer similar, contingent scholarships. It is not just that, if they did so, risk averse students would accept unconditional offers, which they could surely garner in the present competitive environment, but also that the elite schools are less fearful that a large number of students will transfer out after the first year. Note that the scholarship itself discourages transfers. A scholarship recipient who transfers from any school, but even an elite school, will lose the scholarship from the first school and be unlikely to gain a scholarship at the new school. This is because the student is “less valuable” to the second school inasmuch as the rankings do not incorporate information about the GPAs of incoming transfers. It is only those incoming, first year numbers that are oh-so-important. Regulators and well meaning organizations should probably stay clear of this subject, unless they are sure of what they are doing.

Student Blogger - What Are You Hiding in that Statute?: Canvassing Federal Privacy Law

2011-05-04T09:32:48-05:00

We live in an age of information, and it’s old hat by now to bemoan our inability to control the ebb and flow of the information formerly known as “private.” Sensing the dissatisfaction of the voting public and perhaps an interest group or two, lawmakers at various levels of government have passed laws that regulate the use and acquisition of the unimaginably massive amount of data that our daily comings and goings generate. Professor Erin Murphy (NYU) presented a paper to the Public Law and Legal Theory workshop that aims to answer several related questions: What does the federal statutory approach to regulating information with regard to law enforcement look like? How does this compare to the Fourth Amendment’s ban on unreasonable search and seizure? Do the courts or Congress regulate private information more effectively?

Most of the federal statutes regulating private information are fairly new and have been passed since the 1970s. There are a huge number of narrow and specific statutes relating to privacy. In no particular order: the Stored Communications Act, the Bank Secrecy Act, the Genetic Information Nondiscrimination Act, the Real ID Act, and Video Privacy Protection Act. These are a few of the twenty or so federal statutes that regulate in some manner the use and acquisition of private information. Professor Murphy explained that no single coherent story seems to explain the passage of these statutes, although many of them were enacted after a triggering event. For example, during Robert Bork’s Senate confirmation hearings his video rental history was released to the press. Bork’s rental list was unremarkable, but shortly thereafter the Video Privacy Protection Act was passed, which imposed civil penalties on video rental providers that released such information. Despite the knee jerk approach to federal privacy law, each of these statutes has a law enforcement exception that permits government officials to access information as part of a criminal investigation. For example the Right to Financial Privacy Act prohibits banks from disclosing customer information to United States officials unless they are conducting “a lawful investigation or official proceeding inquiring into a violation of, or failure to comply with, any criminal or civil statute or any regulation.” 12 USC § 3401(8).

Federal statutes regulating private information have many commonalities despite the seemingly random collection of statutes. In general, these statutes tend to regulate both the acquisition and use of private information. To return to the Right to Financial Privacy Act, the statute prevents government officials from transferring any financial records obtained in accordance with its law enforcement exemption and narrowly circumscribes permissible uses of information that is legitimately acquired. Relatedly, the Cable Communications Policy Act requires destruction of information “no longer necessary for the purpose for which it was collected.” 47 USC § 551(e). The Fourth Amendment by contrast generally permits free use of information that has been lawfully obtained by government investigators.

Striking the right balance between access and restraint in order to provide the appropriate level of protection to private information is a difficult and controversial task. Will the Supreme Court or Congress do a better job? Professor Murphy argues that given the complex and contested nature of the issue there should be cooperation amongst the branches. Each branch has certain comparative advantages and in tandem the Court and Congress will do a better job than if only one or the other took the reins. Legislators can adopt proactive structural remedies that courts cannot. Legislators are also better able to gather systemic information about the collection and dissemination of information in a particular industry. Courts, however, have historically been more attentive to abuses by law enforcement and have more vigorously used the exclusionary rule to deter government officials from conducting unconstitutional searches and seizures. There are fewer interest groups advocating for the privacy concerns of those who will typically be the subject of the various statutory exemptions for criminal investigations. While groups like the Electronic Frontier Foundation do show up to address the privacy concerns held generally, groups such as the National Association of Criminal Defense Lawyers that represent the interests specifically of criminal defendants have been absent when the various federal statutory privacy laws were considered. All of this goes to show that the best solution is for the two branches to work together, and this appears to already have occurred in some areas of privacy law. For example, the Drivers Privacy Protection Act governs the collection and disclosure of personal information gathered by state DMVs. A portion of the statute authorizes a daily $5,000 fine to noncompliant offices, but only if a public official brings a lawsuit.

The commenters pointed out that you can’t tell which branch is better at protecting privacy without some kind of theory about what the optimal level of privacy protection is. Professor Murphy responded that this paper is intended to push past the question of what the right level of privacy protection is and instead focus on the relative differences between the branches in protecting the privacy rights of individuals against intrusion by government officials. Other commenters pointed out that it is difficult or impossible to evaluate Congress’s track record on privacy without considering the panoply of state laws addressing privacy. In some areas, for example trade secret protection, states have acted in a uniform and sufficient manner such that further legislation is currently unnecessary. Professor Murphy responded that there is such a vast and disparate body of state privacy law that it wasn’t possible to consider in any systematic way the impact of state privacy laws and that considerable debate exists over whether the states have led the way, rather than followed the federal lead, in protecting privacy.

All the talk about courts and Congress left me wondering what role our poor executive branch might be playing in this story. The baseline assumption in the discussion seems to be that executive officials are always going to push to the limits of what is allowed by the two other branches. This might very well be the case, but the story might not be so cut and dry. If there is broad political support for the kinds of privacy legislation that Congress has passed in the last forty or so years, why is the President immune from that pressure? There are various ways in which the President could restrain prosecutors, an Executive Order or revision to the United States Attorneys’ Manual being two such mechanisms. Moreover, certain statutes, such as the provision in the DPPA that provides for a daily fine against non-complying DMVs following a suit by a public official, seem to require a fairly prominent role for executive officials.

Student Blogger - Let's Work Together: Coordination Among Government Agencies

2011-05-02T10:21:35-05:00

It’s no great secret that there are a lot of administrative agencies. A dauntingly large alphabet soup of government agencies regulates many industries, and these agencies often receive overlapping delegations of authority from Congress. As President Obama wryly pointed out in his 2011 State of the Union address, “The Interior Department is in charge of salmon while they’re in fresh water, but the Commerce Department handles them when they’re in saltwater. I hear it gets even more complicated when they’re smoked.” Most of what we hear about administrative agencies and government regulation of industry falls onto one side or another of a debate represented reasonably well by the following articles: “Regulation Lax as Gas Wells’ Tainted Water Hits Rivers” courtesy of the New York Times, and a piece by Alan Greenspan called “Activism” in which the former Fed Chairman blames our slow climb out of recession on too much government regulation. Or if you prefer a more adventurous headline, there is “Regulatory Overkill” courtesy of the Wall Street Journal.

Professor Jody Freeman (Harvard Law School) presented a paper she co-authored with Professor Jim Rossi (Florida State University College of Law) at the Public Law and Legal Theory workshop that builds on the observation of President Obama without getting mired in the stagnant debate of too much/not enough government regulation. Professor Freeman explained that traditionally administrative law has operated under the simplistic assumption that each agency acts separately from all the others in regulating in its own corner of the world. Would it were that it was so, Professors Freeman and Rossi say. Instead, what we have is a sea of agencies often with overlapping or concurrent delegations. To deal with this complexity, agencies need to coordinate. With more coordination it will be easier for agencies to write regulations and adjudicate disputes, and agencies will be able to avoid inconsistencies and redundancies in their regulations and decisions. Moreover, coordination can help mitigate the dreaded “tunnel vision” that regulators focused on a narrow slice of a larger problem are apt to develop.

Lawmakers and regulators have a menu of options to choose from when seeking more coordination between agencies. At one end of the spectrum there is the option of structural integration and the creation of mega-agencies like the Department of Homeland Security. Integration is difficult and costly, so instead lawmakers and regulators might require inter-agency consultation. Consultation can take many forms. For instance, regulators can voluntarily consult with other regulators, or they can draft contract-like memoranda assigning responsibility for various tasks and making other mutual commitments. Or Congress might require regulators from one agency to respond to the suggestions of regulators from another agency. Congress can also require that multiple agencies agree to adopt a single regulatory rule. The President too can take action to increase coordination by issuing Executive Orders regarding coordination between agencies, wielding threats of removal over regulators who won’t coordinate, and generally exert more centralized oversight over coordination through the White House.

Comments offered by the participants at the workshop centered around a related set of themes: How can you tell when coordination will work? How do we know when coordination is what Congress intended when it delegated lawmaking power to the agency? What is the appropriate level of centralized control? In some instances Congress actually intends to create multiple agencies and grant them overlapping delegations. Professor Freeman noted that much of the concurrent jurisdiction and regulatory overlap is, however, not the result of intentional choice by lawmakers, but rather due to the slow and ad hoc build-up of agencies and their responsibilities over time. This paper is intended to be the start of a new conversation regarding coordination between federal agencies. Other participants focused on the fact that the paper is heavily concerned with the inside baseball of regulation rather than the potential political impact of more versus less coordination. Having an efficient bureaucracy is not the end-goal of our regulatory apparatus. Rather, we want our regulators to implement statutory schemes fairly and accurately while taking account of changed circumstances. Professor Freeman noted that she and Professor Rossi strongly support agency coordination, because in some cases regulatory complexity is preventing the public from getting the benefit of programs that Congress has created.

Professors Freeman and Rossi made a deliberate choice to chart the available territory in great detail without becoming bogged down in some of the most difficult issues to resolve. The paper walks through a complicated landscape of MOUs, consultation provisions, joint rulemakings, joint action requirements, and interlocking and incorporated rules. Despite this detail, the paper does not attempt to develop general principles that tell us when regulatory complexity is preventing the public from getting the benefit intended by Congress or what coordination tools should be deployed in response. A paper can do only so much. Nonetheless, Professor Freeman explained that there are many instances of regulatory complexity where everyone can agree that there is a failure of coordination. (This of course raises the question of why the regulators haven’t voluntarily adopted one or more of the coordination mechanisms that the paper highlights.)

Technical though administrative law may be, the profits and public welfare at stake generate corresponding interest groups that are constantly in search of opportunities. When agencies coordinate there will be winners and there will be losers. It remains to be seen what kind of impact a greater emphasis on coordination will have.