Legal Theory Blog

All the theory that fits!


This is Lawrence Solum's legal theory weblog. Legal Theory Blog comments and reports on recent scholarship in jurisprudence, law and philosophy, law and economic theory, and theoretical work in substantive areas, such as constitutional law, cyberlaw, procedure, criminal law, intellectual property, torts, contracts, etc.

This page is powered by Blogger. Isn't yours?
Wednesday, April 30, 2003
Going Nuclear: The Constitutionality of Recess Appointments to Article III Courts
    Let me begin with a story, part fact, part fancy. Let’s call it . . .
    A Tale of Two Law Clerks Like all good postmodern tales, this one begins out of sequence. So let’s . . .
      Fast Forward--The Year: 2035. The Place: Washington, the 20th Floor of the New Supreme Court Office Building.
      The clerk sat before the desk. On the other side, gazing out the window at the Mall, sat the Justice, white hair and deeply lined black face--at 93 years of age, still hale. It was the clerk’s first day, and she worked up the courage to ask a question. Two of her colleagues sat nervously beside her. “Your honor,” she began, “can you tell us about life tenure. I mean, Professor Oman told us about the Crisis of ’03, but you actually lived through it. Is it true that you are the only federal judge who still has life tenure?”
      “Not yet,” the Justice laughed. “Jeff Sutton is still technically on senior status. But almost.” He turned away from the clerk, and stared out the window at the black obelisk occupying the space where the Capitol once stood. “I know that people say it started in ’03. Nate, er, your Professor Oman, probably knows more about the political part of that than I do. It can be pretty isolated here.” Justice Clarence Thomas swiveled and faced the clerk, “And anyway, it really all started back in 1985, when the Ninth Circuit decided a case called United States versus Woodley. It was an en banc and in those days that meant something. Woodley, you know, held that recess appointments to federal courts are constitutional, and boy did that become important. You see . . .”
      Reverse--The Year: 1985. The Place: Los Angeles, the 12th Floor of the Old United States Courthouse.
      The clerk sat before the desk. On the other side, gazing out the window at the mountains outlined in the smog sat the Judge, a vigorous and alert man in his 50s. The clerk was in the office to get an assignment. It was early in his clerkship, and he was eager and just a bit nervous.
      Woodley, said the Judge. “I’d like you to work on United States versus Woodley. It’s gone en banc, and the Court has voted to reverse the panel decision. My decision!"
      “What’s it about?” asked the clerk.
      “It’s about whether Article III of the Constitution means something,” answered Judge William Norris. “And I think it does. It’s about whether judges without life tenure can serve on Article III courts. And I think they can’t. Here is what happened . . . ”
      Before I go any further, I need to make a disclosure. I was the second clerk. I drafted William Norris’s dissenting opinion in United States v. Woodley. That fact makes it difficult for me to be completely objective about the question that I feel compelled to address in this post: Is it constitutional for the President to make a recess appointment to an Article III Court? In 1985, I believed that the independence of the federal judiciary served a crucial constitutional function, and I still believe that today. In 1985, I saw that it was not easy to make out the case that recess appointments to the judiciary are unconstitutional; those difficulties loom even larger today. I will do my very best to be objective, but you should know that I have been thinking about this issue for almost 18 years, that my work is at stake, and that my pride is on the line. I will return to our Tale of Two Clerks at the end of this post, but for now, on to the analysis!
    The Constitutionality of Recess Judicial Appointments Let’s do it this way: first text, then history, then function.
      Text The question as to whether recess appointments are constitutional implicates two provisions of the Constitution--the recess appointments clause and Article III. The best way to begin is simply to lay out the text. Then we can move to interpretation.
        The Recess Appointments Clause: “The President shall have Power to fill up all Vacancies that may happen during the Recess of the Senate, by granting Commissions which shall expire at the End of their next Session.” U.S. Const. art. II, § 2, cl. 3.
        The Good Behavior and Undiminished Compensation Clauses: "The judges, both of the supreme and inferior courts, shall hold their offices during good behavior, and shall, at stated times, receive for their services, a compensation, which shall not be diminished during their continuance in office." U.S. Const. art. III, § 1.
        What do these clauses mean? When I drafted the dissenting opinion in United States v. Woodley, here is what I thought. The usual understanding of Article III, Section 1, is that it confers life tenure on Article III judges. From that fact, a corollary could be inferred: the good behavior clause prohibits anyone without life tenure from serving as an Article III judge. Using similar reasoning, we could infer from the guarantee of undiminished compensation a prohibition on anyone whose compensation might be diminished from serving as an Article III judge. Recess appointees lack life tenure and Congress has not guaranteed them undiminished compensation--in fact, Congress has tried to deny some recess appointees any compensation at all. Therefore, the text of Article III, Section 1, prohibits recess appointees from exercising the judicial power of the United States.
        But what about the recess appointments clause? That clause applies to "all Vacancies that may happen during the Recess of the Senate" and thus, the recess appointments clause would appear to apply to judicial vacancies as well. How can we reconcile the language of the two clauses?
          --General versus Specific. We could try to argue that one clause is more specific than the other, but this stratagem is of no avail. Article III is specific to judges, but makes no mention of vacancies. The recess appointments clause is specific as to vacancies, but makes no mention of judges.
          --Absolute versus Qualified. We might try to argue that the recess appointments clause is absolute, and therefore, the recess appointments clause must give way. But this argument does not work either. The recess appointments clause says "all vacancies" and therefore is every bit as unqualified as is Article III. In fact, the recess appoints clause by using "all" seems to have a bit of an edge on the basis of this argument.
        Neither of these tried and true techniques of textual adjustment will do the trick. Is there any other way to reconcile the two clauses. Here is an interesting fact. The argument began with the assumption that Article III grants life tenure to federal judges. But it doesn't. All Article III does is grant tenure during good behavior. In order to determine the meaning of the good behavior clause, we need to construe it intratextually by juxtaposing it with the impeachment clause. Let's take a look at that now:
        The Impeachment Clause: The President, Vice President and all civil officers of the United States, shall be removed from office on impeachment for, and conviction of, treason, bribery, or other high crimes and misdemeanors. U.S. Const. Article 2, § 4.
        The guarantee of life tenure for confirmed Article III judges results from the operation of the good behavior clause with the impeachment clause. Read together they lead to the inescapable conclusion that once confirmed an Article III judge cannot be removed except by impeachment--and hence, confirmed Article III judges have life tenure.
        But what about recess appointees? Once again, we can proceed intratextually, adding now the recess appointments clause to the mix. Recess appointees have terms that are guaranteed through the end of the next Session of the Senate, because they are civil officers of the United States, they may only be removed before that date by impeachment. This interpretation reconciles the three clauses. The good behavior clause interacts with the impeachment clause and the recess appointments clause to produce a consistent and coherent meaning for the text of all three provisions.
        Hold your horses! What about the corollary of the good behavior clause? Doesn't that prohibit anyone without life tenure from serving as an Article III judge? I wish it did. But here is the problem. The corollary isn't anywhere in Article III. The good behavior clause is it. That's all she wrote. The corollary accounts for life tenure for confirmed judges, but results in a direct collision between two clauses, if it is applied to recess appointees. The alternative interpretation that I have offered here accounts for life tenure, and makes the constitution consistent. The text of the Constitution does not support the proposition that recess appointments are unconstitutional. When I drafted the dissenting opinion in Woodley, I finessed this problem by arguing that the text was inconclusive. I still believe that. By itself, the text does not close the door on the argument that recess appointments are unconstitutional. We still need to consider history and function.
      History What about the history of recess appointments to the judiciary? History plays two distinct roles in constitutional interpretation. First, history is a guide to original meaning. Second, history can establish a constitutional tradition, and hence is a guide to the values we summarize by the phrase, the rule of law. Both uses of history are relevant to the constitutionality of recess appointments to Article III courts:
        Original meaning. Judge Norris's dissent in Woodley argues that there the contemporaneous writings of the framers and ratifiers do not provide evidence of any specific intent with respect to the interaction of Article III and the recess appointments clause. I stick by that conclusion today. But there is another piece of evidence that gave me fits when I was drafting the Woodley dissent. The first President, George Washington, made recess appointments to the judiciary. Here is a quote from the majority en banc opinion:
          In 1789, shortly after ratification of the Constitution, George Washington, who had served as President of the Constitutional Convention, exercised his power under the recess provision. During the recess between the sessions of the First Congress, he conferred three recess district judge commissions. 30 The Writings of George Washington, 457-58, 473, 485 n. 75 (J. Fitzpatrick ed. 1939). At the time of these appointments, Edmund Randolph and two contributors to The Federalist, Alexander Hamilton and John Jay, served as members of President Washington's Cabinet. There is no evidence that they doubted the constitutionality of the recess appointments. Moreover, the district court judges were confirmed upon the return of the Senate without objection to their recess appointments. 1 Executive Journal of the Senate 38, 40 (1790). It is further noteworthy that President Washington's recess appointments of Justice Johnson in 1791 and of Chief Justice Rutledge in 1795 went unchallenged
        The Supreme Court has been fairly consistent with respect to this sort of evidence about early historical practice and for good reason--in some ways it gives us the best possible evidence about the original meaning of the Constitution.
        What argument can be made in reply? Here is the relevant text from Judge Norris's dissent:
          In the case at hand, the historical record fails to inform us whether that the Framers considered the possibility that recess appointments could violate Article III. Indeed, the majority is careful to observe that these appointments by President Washington were made without objection or apparent consideration of the potential conflict with Article III. This blank record stands in sharp contrast with the full record of plenary consideration given by the First Congress to the First Amendment implications of appointing a legislative chaplain. Thus, the early historical practice of recess appointments to the judiciary has not been "infused with power" by the considered judgment of the Framers. As Marsh suggests, such a practice is entitled to less deference than a practice that we know was "considered carefully" by the Framers. Marsh, 103 S.Ct. at 3335. Moreover, the first legislative chaplain was appointed by the very same body-- the First Congress--that proposed the Bill of Rights. There is no reason to credit George Washington with any special insight into how the Framers intended the recess appointment power of Article II to interact with the salary and tenure provisions of Article III.
        Not bad, considering what there was to work with. But look at the moves that the Woodley dissent was forced to make. First, the dissent relies on the fact that no one objected. It is absolutely true that this might mean that a grave constitutional problem was overlooked. I thought that in 1985 and I still think it today. But it surely is evidence that the Washington, Randolph, Jay, and Hamilton read the two clauses as textually consistent. That's no accident. The two clauses--as we have seen--are textually consistent. Second, the dissent says that George Washington had no "special insight into how the Framers intended the recess appointment power of Article II to interact with the salary and tenure provisions of Article III." That sentence made me nervous when I drafted it. It's true, but it is misleading for two reasons: (1) Washington wasn't alone--two of the authors of the Federalist Papers and his Attorney General were in on the recess appointments decisions; (2) Washington was the Chair of the Constitutional Convention in Philadelphia. Does that give him "special insight"? Probably not. But special insight isn't the standard. Do Washington's recess appointments provide evidence of original meaning? The Woodley dissent had to concede that they are some evidence of original meaning. That now seems to be a bit of an understatement.
        Tradition and the Rule of Law. History has another role to play in Constitutional interpretation. The Supreme Court will frequently defer to a long historical tradition or practice--even though there are arguments that the tradition contravenes the text or spirit of the Constitution. There have been a lot of recess appointments over a very long time. Although the argument has occasionally been made that recess appointments are unconstitutional, that argument has almost always failed. The Ninth and Second Circuits have rejected constitutional challenges to recess appointments; no court of appeals has sustained a challenge. Republicans and Democrats have made use of the recess appointments power. Supreme Court Justices have been recess appointees. Chief Justices have been recess appointees. If a long historical tradition suggests that a practice is constitutional, then this provides additional evidence that recess judicial appointments are constitutional. The Woodley dissent essentially conceded this point, but argued that it was outweighed by an important constitutional value--judicial independence.
      Function And this brings mean to the third member of the trilogy, text, history, and function:
        Judicial Independence The strongest argument in the Woodley dissent was that the independence of Article III judges is important to the Constitutional scheme. I believed that in 1985 and I believe it today. In fact, I think that I have a much deeper appreciation of the reasoning behind the good behavior clause today than I had in 1985. Judicial independence is important because we want judges to resist the politicization of the judiciary. We want judges who will decide the cases before them on the basis of law and not politics. We need judges with he judicial virtues and especially with the virtue of justice--the disposition to decide disputes on the basis of the law and to resist the temptation to decide on the basis of personal preference or political ideology. But even the most courageous judges will serve poorly as the guardians of individual liberty if they can be removed at the whim of the political branches. So far, so good. Judicial independence disfavors recess judicial appointments. Is there any constitutional value on the other side of the scale?
        Deadlock When I drafted the dissenting opinion in Woodley it seemed to me that recess appointments to the judiciary served no valuable constitutional function. The only good reason for recess appointments, I thought, would simply be efficiency and convenience. Recess appointments would allow judicial vacancies to be filled during the then-longer recesses of the Senate. In the event of a freak accident, it could take weeks for the Senate to reconvene. But today, the Senate could come back in session in a day or two in a true emergency. And the federal judiciary and the Supreme Court are both much larger, and hence under almost any imaginable circumstance they could function for weeks or even months with vacancies unfilled. So, it seemed to me that the recess judicial appointments were an unqualified bad as a matter of constitutional policy. But I now see this issue through different eyes. Step back for a moment and consider the constitutional values implicated by recess judicial appointments:
          --Checks and Balances. The Senate's power to advise and consents serves a checking function on Presidential power.
          --Judicial Independence. The good behavior clause serves to promote the rule of law by giving judges independence from the political branches.
          --Functional Continuity. The recess appointments clause insures that the judiciary can continue to function in the event the Senate cannot or will not confirm nominees to judicial office.
        No system can simultaneously realize all three constitutional values. Checks and balances create a risk of deadlock and constitutional crisis. The recess appointments clause insures functional continuity by creating a deadlock breaking mechanism, but that mechanism compromises judicial independence. If the President could make lifetime recess appointments, that would provide judicial independence but do greater damage to checks and balances. The Woodley dissent simply did not consider the possibility that the politicization of the judiciary might someday produce a persistent deadlock, resulting in the depopulation of the judiciary. If a minority of the Senate insists that advice and consent means control, then the Constitution does not demand that the President back down and appoint judges that share the political ideology of his political opponents. Nor does the Constitution require the President to create judicial emergencies. The Constitution provides a mechanism that can avert temporary crisis. Whereas in 1985, I thought that recess appointments served no constitutional value while they impinged on judicial independence, I now think the situation is more complicated. And that leads me to . . .
      An Uncomfortable Conclusion Let's review. The text of the three clauses, the recess appointments clause, the good behavior clause, and the impeachment clause can be read in two ways. The three clauses are consistent if we read good behavior so as to guarantee life tenure for confirmed judges and to guarantee tenure until the end of the next session of the Senate for recess appointees. We can also read the three clauses so as to produce a contradiction between the good behavior clause and the recess appointments clause. From a textualist standpoint, it is clear that the former interpretation is to be preferred to the later. History provides us with strong evidence that the original understanding of the two clauses was that the President had the power to make recess judicial appointments--indeed, that was the practice almost immediately after the Constitution's adoption. History also tells us that the practice of recess appointments is a long-standing historical tradition; Presidents of all parties and at many different times during the nation's history have engaged in the practice of making recess appointments to every federal court, including the Supreme Court. With respect to constitutional values, there is an inherent and irresolvable conflict between the constitutional values of checks and balances, judicial independence, and functional continuity, allowing recess judicial appointments provides an imperfect compromise between the three values. In sum, the text and history of the Constitution support recess judicial appointments. An analysis of the relevant constitutional values suggests that recess judicial appointments represent an imperfect compromise solution to an inherent tension between three important principles. As I now see it, these considerations can only lead to one conclusion--recess judicial appointments are constitutional, but should be used sparingly--except perhaps in unusual circumstances.
    A Possible World--Article III Courts Without Life Tenure
      We need to think seriously about the implications of wholesale use of the recess appointments power for judicial office. The time when the implications of this possibility could safely be ignored has already passed. Indeed, thinking about the implications of recess judicial appointments is part of the process that can prevent them from coming to pass. So let's imagine a possible world where recess appointments become the norm rather than the exception. Here is how it might start:
      Phase One: Recess Appointments as Retaliation for Democratic Obstruction The judicial selection process is in a downward spiral of politicization. Republicans denied President Clinton floor votes on many of his nominees and Democrats have escalated, resorting to wholesale use of blueslipping and the filibuster. What's next? Perhaps everyone will wake up and smell the coffee. It may be that Democrats and Republicans are about to reach a historic compromise on the confirmation process, but as of today, it sure doesn't look like everyone is about to become cooperative. So let's try a thought experiment. What if President Bush did threaten the use of recess appointments and the Democrats not only didn't back down, but escalated--filibustering every nominee for judicial office? The President would have few alternatives. He could back down and start nominating judges whose political ideologies were acceptable to Democrats, but that hardly seems likely. He could allow the Democrats to block all nominees and simply allow judicial vacancies to go unfilled until after 2004--but that seems both irresponsible and the equivalent of political surrender. He could get lucky and persuade a few Democrats to vote for cloture--but so far that strategy has been unsuccessful. Or he could make recess appointments. Let's suppose that is the option chosen by the President.
      Phase Two: Democratic Reaction How would the Democrats react to wholesale use of the recess appointments power? Here are the options:
        --Democrats could cave in, and start giving the President floor votes. That seems terribly unlikely, given that Democrats are likely to see the President's move as outrageous escalation of the confirmation wars.
        --Democrats could try the litigation options, but that seems unlikely to be successful, although there might well be political benefits from the effort.
        --Democrats could continue to filibuster and make the recess appointments an issue in the 2004 election. After pursuing the litigation strategy, this seems like the most likely outcome. So what would happen next?
      Phase Three: After the 2004 Election At this point it gets complicated, because either Democrats or Republicans could win the Presidency and/or the Senate. We need to explore several scenarios:
        --Scenario One: If the President is reelected, and the Republicans do not gain the 60th vote in the Senate, then Democrats have two options:
          + Variation 1-A: Back down and let the President have floor votes that he is sure to win, or
          + Variation 1-B: Continue to filibuster the Presidents nominees--with the President countering by continuing the practice of making recess appointees.
        --Scenario Two: If the President is reelected, and the Republicans do gain the 60th vote in the Senate, the President is likely to use the opportunity to appoint candidates that appeal to the Republican base. In Scenario Two, the use of recess appointments would end, until the next stalemate develops.
        --Scenario Three: If the President is not reelected, and the Democrats do not gain control of the Senate (or fall short of 60 votes), then Republicans have two choices:
          + Variation 3-A: The Republicans back down and give the Democrats floor votes. This seems unlikely; the Republicans are likely to be in no mood to compromise after the Democratic filibusters and subsequent electoral victory.
          + Variation 3-B: The Republicans filibuster the Democratic President's nominees. This puts Republicans in the same position as the Democrats were in Phase Two and the next big event would be the election of 2008.
        --Scenario Four: The President is not reelected and the Democrats get 60+ seats in the Senate. This is the mirror image of Scenario Two. The Democratic President will appoint judges and justices who play to the Democratic base.
      Phase Four: Permanent Recess Appointments Suppose that electoral politics does not break the stalemate. That is, suppose that neither the Democrats nor the Republicans are able to control the Presidency and enough Senate votes to break a filibuster. Suppose further that the opposition party will not back down. The downward spiral of politicization has progressed so far that a political compromise is no longer feasible. Where would we find ourselves? In a brave new world, where recess appointments were the rule and not the exception. Judges and Justices would serve for terms that would last up to two years--beginning with the first recess in one Senate Session and ending when the next Session terminates. When the Presidency turned over, the power to control these judgeships would also turn over. There would be a wholesale change in the composition of the judiciary. The legacy life-term judges would continue in office, but the recess-appointment judgeships would be filled by the new President, who would appoint members of his own party. As time passed, more and more of the federal bench would be occupied by recess appointees as the legacy life-term judges resigned, retired, or died in office.
    Article III Without Life Tenure What would we make of this brave new world? Here are some thoughts:
      Horror Of course, our first reaction is horror. We have all been taught that life tenure is a cornerstone of the Philadelphia Plan. Without life tenure, the federal judiciary would be unable to serve it's constitutional function as the guardians of individual liberty. Without life tenure, the federal judiciary would become politicized. Without life tenure, the rule of law would be fundamentally compromised by judges who decided on the basis of political ideology rather than the law.
      On the Other Hand But wait a second. The way that we got into this mess begins with a judiciary that is already being politicized. If both parties are willing to appoint virtuous judges, who are committed to the rule of law, relying on text, history, and precedent rather than personal ideology, then we would never enter a downward spiral of politicization. The downward spiral--the confirmation wars--are a symptom of the deep politicization of the federal judiciary that has occurred over a period of decades. Once the parties woke up to the fact that federal judges were becoming political actors, then they realized that political control of the composition of a judiciary with life tenure was one of the great prizes of control of the Presidency. But once the parties realize that, a further realization follows. The ability to block judicial nominees is one of the great benefits of holding at least 41 seats in the Senate.
      Here is the crucial insight. Once the judiciary has become politicized, it is no longer clear that lifetime tenure is justified. We want lifetime tenure to safeguard the rule of law. Lifetime tenure looks like a pretty silly idea if it is being used to safeguard the power of judges who have been thoroughly politicized. If the judiciary is just another political branch, then it should be politically responsive. Let me repeat that idea in a more pungent form. If the judiciary is just another political branch, then it is appropriate for judges to be turned out of office every four years. Politicized judges pose a countermajoritarian difficulty. Politicized judges with life tenure are the most dangerous branch. But the recess appointments clause when combined with advice and consent and the filibuster provides a self-correcting constitutional mechanism. If the judiciary becomes thoroughly corrupt and partisan politics prevents the political branches from agreeing on the appointment and confirmation of judges devoted to the rule of law, then the constitutional solution is to replace lifetime tenure with judicial terms for a limited period of years--and that solution is already available in the recess appointments clause. Let me be clear: I am not arguing for recess judicial appointments. I am arguing against them. But I am arguing against recess judicial appointments because I am in favor of the rule of law. If I am given the Hobson's choice--politicized judging with life tenure or politicized judging without life tenure--the choice is painful but clear. The point of the thought experiment is that we should avoid the Hobson's choice. How can we avoid it? Compromise. Both parties should agree on two principles of judicial selection. Principle One: judges should be selected on the basis of their possession of the judicial virtues, and especially the virtue of justice--fidelity to the rule of law. Principle Two: each party should agree to allow the nominees of the other party to come to a floor vote, and Senators should vote to confirm--unless there is good evidence that the nominee lacks the constituent elements of good judicial character. The possible world of Article III without Life Tenure is not the only ending point for the downward spiral of politicization, but contemplating this possibility can and should serve a salutary purpose. It is in the long run interest of both political parties to call off the confirmation wars. The time for escalation should end, and the time for compromise should begin.
    A Tale of Two Law Clerks And what happens to our two law clerks?
      From Past to Present The second clerk is alive and well. In 1985, he thought that Woodley was an important case in principle but a curiosity in practice. Today, he realizes that the issue that the Ninth Circuit grappled with in 1985 was of profound importance. The recess appointments clause is, in reality, one of the most important features of the Constitution. It's deadlock breaking function may only come into play in the most extreme of times, but it is exactly in those times that a workable constitutional framework is crucial. In 1985, the second clerk had romantic notions about the role of the judiciary. He imagined innovative judges who would wield the law like a sword, striking down injustice with newly minted constitutional rights. In 2003, the second clerk is more skeptical about the transformative role of the law. Today, he is more concerned about text, history, and precedent, and less enamored of new and fancy theories. He has the same ideals but a different view of the role and rule of law.
      Back to the Future And in 2035 . . .
      . . . and Professor Oman suggested that the crisis of 2003 actually led to the solution of the countermajoritarian difficulty," the clerk continued, no longer nervous but excited by the exchange of ideas.
      "I'm not so sure about that," the Justice replied. "But I do know that this place is a whole lot different now that Justices come and go every couple of years. Why, some of these young ones, I hardly learn their names before a new bunch arrives." He swiveled again, and looked down through five inches of bullet proof glass upon the Mall, eerie now in its emptiness. "Yep, it sure has changed."

For more on the confirmation wars, see Breaking the Deadlock: Reflections on the Confirmation Wars. For a guide to all my posts on judicial selection, click here.

Hasen on Rationality in the Confirmation Wars Rick Hasen has an excellent post on the rationality of the Democrat's decision to filibuster Estrada and the possibility that the President might use the recess appointments power.

New Papers

Tuesday, April 29, 2003
The Downward Spiral of Politicization of the Judicial Confirmation Process: The Recess Appointments Option
    Introduction Politicization of the judiciary is nothing new in the United States. Great issues, from the constitutionality of the Bank of the United States to the validity of FDR's New Deal have, from time to time, injected partisan politics into the selection of Supreme Court Justices. The past few decades have seen an escalation of that politicization, as the Court's decisions on a wide variety of issues have become transparently political and hot button issues, such as the death penalty and abortion became political footballs on the Court. In the last two administrations, however, a new and disturbing tendancy has emerged. Politicization has been pushed down--increasingly Court of Appeals and District Court nominations have become political in a new sense. It has always been the case that Presidents have favored members of their own parties. Increasingly, it is the case the nomination and confirmation is a battlefield and political ideology is the victory condition. The politicization of the confirmation process for lower court judges became evident in the Clinton administration, but it is difficult to escape the conclusion that it has become more pronounced as Democrats have engaged in wholesale use of blueslipping and filibustering to prevent the confirmation of the President's judicial nominees. Republicans percieve these moves as escalatory and unprecedented in scale and scope; this leads to counter moves, such as recent refusals to honor Democratic blueslips. Democrats believe that their own moves are justified as retaliation for similar Republican moves during the Clinton administration. The natural next step is a blanket filibuster of every nominee whose ideology is in line with the President and the leadership of the Republican Senate caucus. And one can expect that Republicans will look for a countermove. One such countermove is to raise funds on this issue and spend it against vulnerable Democrats, and Democrats have already made judicial confirmation a key component of their own fund raising strategy. We are in a downward spiral of politicization.
    The Next Step In the short run, the politicization of the confirmation process is political theater. Both parties posture and play to the media. But the political theater phase of the confirmation wars is about to end. There are at least two reasons why the sitzkrieg cannot continue. The first is that the judiciary is becoming depopulated; judicial emergencies have already been declared in several circuits. The second reason is that the battle is about to move to the Supreme Court. If William Rehnquist and Sandra O'Connor resign this summer, as is widely expected, the mother of all confirmation battles will be joined. There is no reservoir of good will between the parties to draw upon--that has been depleted over the course of the last few months. This will be an intense, bitter, partisan fight--with the memory of Bork and Thomas steeling Republican wills for an all-out, no-holds-barred contest with Democrats who see the crucial vote to overrule Roe v. Wade as potentially on the line. So what's next? Consider three possibilties:
      Compromise on Political but Moderate Judges In theory, there is compromise. Democrats and Republicans could agree that judicial nominees would be selected from the political center. On the real hot button issues, the pie could be divided--one pro-choice justice and one pro-life justice, as vacancies on the Supreme Court open. But no one really believes that such a compromise is possible. Abortion is percieved as an all or nothing issue. Either Roe v. Wade is overruled or it is affirmed--although there may be room for a modified Roe that solution satisfies almost no one. At some point, dividing the pie would mean that the fifth vote would begin to alternate with each resignation. A Supreme Court that periodically overruled and then reinstated Roe would be a laughing stock and would do incalcuable damage to the rule of law.
      Depopulation of the Judiciary The second alterantive is depopulation of the judiciary. The stalemate could persist. Democrats could filibuster any Republican nominee who isn't "moderate," and the President can stop sending "moderates" to the Senate. The Supreme Court can function with seven Justices. The lower federal courts could limp along with fewer and fewer judges. Of course, the depopulation option cannot last for very long. On the one hand, the ability of the courts to do the nation's judicial business will eventually begin to suffer substantial impairment. On the other hand, the depopulation of the Supreme Court will have obvious political consequences. For example, if Rehnquist and O'Connor were to resign and not be replaced--the ideological tilt of the Court would move dramatically to left, with Stevens, Souter, Ginsburg, and Breyer forming a working four Justice majority. The pressure to break the stalemate would begin to build. And this leads me to the third option.
      Recess Appointments The Recess Appointments Clause, Article II, Section 2, Paragraph 3 provides: "The President shall have Power to fill up all Vacancies that may happen during the Recess of the Senate, by granting Commissions which shall expire at the End of their next Session." My colleague, Rick Hasen, started blogging about the wholesale use of recess appointments some week past. And that option has been discussed by Hugh Hewitt in an essay in the Weekly Standard. The use of recess appointments to the judiciary has ebbed and flowed since 1789, but it has been rare in recent years. The reason is that the Senate is jealous of its constitutional perogative--the advice and consent power. By statute, most recess appointees cannot be paid, and the Senate, from time to time, reminds the President that recess appointees are unlikely to be confirmed. Given the uncertainty of confirmation, most of those qualified to serve as federal judges or Justices of the Supreme Court are likely to be unwilling to accept a recess appointment. Hence, the use of the recess appointments clause has been sparing, and its wholesale use has been deemed impracticable.
    The Barnett Plan Today, Randy Barnett (Boston University) published Benching Bork: How to end the war over judges in the National Review Online. Barnett suggests an ingenious devices for overcoming the political obstacles to recess appointments:
      President Bush could threaten to line judicial openings with committed conservative and libertarian recess appointees, people who are too old, too young, too smart, too conservative, or too burned by previous failed nominations to ever be considered for ordinary judicial appointments. Unlike practitioners who cannot abandon their practice for a short stint on the bench, professors who can take a few semesters off and judges with no prospects of higher judicial office would be ideal. It would be like a judicial clerkship program for conservative and libertarian law professors that can continue as long as there is a Republican president.
      If the Democrats don't think they like "stealth" candidates like Miguel Estrada, just wait until they experience the delights of judges Richard Epstein, Lillian Bevier, Bernard Siegan, Lino Gragia, and dozens more like them on the Courts of Appeals. Or how about Morris Arnold, Alex Kozinski, Richard Posner, Frank Easterbrook, Edith Jones, or even Robert Bork as recess appointments to the Supreme Court? For the White House, the point of the exercise would be to propose a list of bright and articulate judges who are far more ideologically objectionable to the Democrats and their activist support groups than the president's current nominees.
    Barnett's suggestion is ingenious, because it gives the President a credible threat of making wholesale use of the recess appointments power, thereby nullifying the Democrats major weapon--the filibuster.
    But Where Would This Lead? Wholesale recess appointments would constitute a radical change in the way that judges are selected. Where would this lead? I will have more to say about this topic in another post. For now, here are some possibilities worth thinking about:
      A Grand Compromise Barnett himself believes that the recess appointments option would lead to a grand compromise. Here is how he puts it:
        The beauty of this threat is that it need never be implemented. Once a suitably long list is circulated privately — or, if need be, publicly — President Bush can offer not to appoint any of them in return for a floor vote on all his current and future nominees. Senate Democrats won't have to commit to voting for the president's nominees, they would just need to commit to allowing a full-Senate vote. To cement this new social contract and end the downward spiral — and for the sake of fairness — Senate Republicans would commit to support changing Senate rules to ensure that nominees of future Democratic presidents also get the same right to a floor vote.
      If Barnett is right, then the threatened use of wholesale recess appointments might be a way out of the current downward spiral of politicization. By threatening to "go nuclear," the President might induce Senate Democrats to agree to multiparty talks. (Does this sound familiar?) But . . .
      Retaliation But Democrats may not be in the mood for compromise. In fact, they might see this move by the President as exactly what the Democratic party needs to activate its base. Of course, activating the base may not be the best strategy to elect a Democratic President in 2004--an active Democratic base may produce an unelectable Democratic candidate. But an active base has another side effect--a massive influx of campaign contributions for incumbent Democratic Senators and Representatives. And the Democrats can open a second front. There is a litigation strategy. Howard Bashman of How Appealing has argued that recess appointments to the judiciary violate the good behavior and undiminished compensation clauses of Article III (see also here). The host of activist Democratic lawyers that fought the legal battle for Gore in Florida could be reactivated, and their Republican opponents could join the fray. The issue would eventually land where? Why in the Supreme Court, of course, with two of the sitting Justices (the replacements for O'Connor and Rehnquist?) possibly themselves recess appointees. They might recuse themselves, but then again, they might not. With the future of the Republic on the line, this case would make Bush v. Gore look like a carnival sideshow.
    My next post on this topic will examine the merits of the constitutional case against recess appointments. Tune in tomorrow. Same bat time. Same bat channel. And for a guide to my posts on judicial selection, click here.
Post Script: Howard Bashman reacts here. And there is a post on Demagogue here. And Howard Bashman reports that Senator John Cornyn (R-TX), who serves as Chairman of the Senate Judiciary Committee's subcommittee on the Constitution will hold hearings on reform of judicial confirmation process, find solutions to fix downward spiral of partisan obstruction. And Phillipe de Croy argues against Barnett's ideas, both on prudential and constitutional grounds. And Rush Limbaugh endorses the Barnett Plan with audio here.

New Look for the Election Law Blog Check out Rick Hasen's new look at the Election Law Blog. By the way, it looks absolutely terrific, Rick. I'm jealous.

The Confirmation Wars I have been arguing for some weeks now that the judicial selection process is in a downward spiral of politicization. Further evidence comes today from Howard Bashman who reports on an article from Rollcall:
    "Senate Republicans are expected to try to force votes on two of President Bush's top judicial picks this week, testing Democratic will to maintain simultaneous filibusters and likely imperiling working relations between the two parties for the foreseeable future." And the article goes on to note that Democrats are accusing Republicans of stalling the confirmation vote for Fifth Circuit nominee Edward C. Prado to gain further rhetorical advantage in the confirmation battle over D.C. Circuit nominee Miguel A. Estrada.
My most recent post on this topic appeared on Sunday, link here. For a complete collection of links, click here.

Monday, April 28, 2003
New from Online Papers in Philosophy Alex Rosenberg (Duke, Philosophy) posts On The Priority of Intellectual Property Rights, Especially in Biotechnology. From the abstract:
    Here I want to advance an argument for giving intellectual property rights which are untrumpable by any other sort of considerations from human welfare. The notion that there are basic human or natural rights, which cannot be overridden no matter what the welfare-consequences of do so, is a familiar one. But no one supposes that intellectual property rights, or indeed any property rights, are among this privileged set. Moreover, that considerations from human welfare should underwrite such status for any human right is perhaps more surprising. After it all, it is to limit the writ of welfare-considerations that untrumpable rights are invoked.

Monday Workshop Max Kolbel (Birmingham) presents Indexical relativism vs genuine relativism at Oxford's Seminars on Moral Philosophy series.

Fontana on Comparative Constitutionalism David Fontana has posted Refined Comparativism in Constitutional Law on SSRN. Here is a taste from the abstract:
    This Article considers the possible uses of comparative constitutional law in American constitutional interpretation. Surveying the debates about the uses of comparative constitutional law at the Founding, and tracing these debates to contemporary times by looking at the role of comparative constitutional law in the history of the U.S. Supreme Court, David Fontana suggests that a moderate, workable practice of using comparative constitutional law is consistent with the original intention of the Founders and has some precedent in the case law of the U.S. Supreme Court. This Article lays out a "refined comparativist" approach, whereby a court would consider comparative constitutional law only when faced with a "hard case," the comparative constitutional law can add something distinctive to American constitutional interpretation, and the contextual differences between the United States and the country the American court is considering borrowing from are slight. This Article then defends this refined comparativist model, paying particular attention to several strands of contemporary constitutional scholarship, before applying refined comparativism to address the constitutionality of hate speech.
And while you are at, you might check out his A Case for the Twenty-First Century Constitutional Canon: Schneiderman v. United States.

Hot Downloads Department: Weatherson on Land Disputes The issue is how to resolve disputes between nations or ethnic groups--a topic of no small importance. Hillel Steiner and Jonathan Wolff had a paper in Analysis. The gist of their idea is to conduct an auction--by the way, scroll down for Paul Klemperer's latest paper on auction theory. Here is Weatherson's summary:
    The idea is that we should auction off the land, with the loser of the auction getting the money. While this might mean that the richer party will normally end up with the land, and this is normally not thought to be a good thing, if the auction is conducted as they specify “it will turn out that the other party ends up with something which, in the circumstances, it prefers to the land: lots of money.”
Brian Weatherson (who authors both Thoughts Arguments and Rants and the invaluable Online Papers in Philosophy) has posted a short paper that critiques the Steiner and Hillel proposal--get it while its hot.

New on SSRN A slew of new and interesting papers on SSRN. Here is the roundup:

Wolff on Rawls On the The Philosophers Magazine, Jonathan Wolff (University College, London) has a very nice piece entitled A Theory of Justice: the book that changed everything. Here is a taste, but read the original:
    Consider, too, the much-debated question of whether A Theory of Justice presents a political philosophy valid for all times and places, or one that is culturally relative only to the US and societies like it. Again, in 1971 methodologically this question of scope was not widely discussed. Rather, the methodological debate was formed from two related strands. One we have already seen: answering the individual subjectivism – the moral solipsism – of logical positivism. The other was set by Hare: the "logic of morals" debate, in which the question was that of how far progress in substantive moral and political philosophy is possible on the basis of logical analysis of the moral concepts. Hare, of course, argued that logical analysis is all we need. Rawls credits Burton Dreben for the advice that this method will not advance the aims of moral and political philosophy. By, instead, applying Nelson Goodman’s idea of reflective equilibrium, Rawls changed the way we now conduct ourselves in moral and political philosophy. But in doing so he generated questions about what such a methodology might deliver – questions on which we are still undecided 30 years later.
And also from TPM, Julian Baggini has Rawls's Life: The quiet American.

New from Economic Theory News Michele Piccione (London School of Economics) and Ariel Rubinstein (Princeton and Tel Aviv, Economics) have uploaded Two Tales of Power and Distribution of Wealth in the Jungle. Here is an abstract:
    In the jungle, power and coercion govern the exchange of resources. We study two simple, stylized models of the jungle. The first model mirrors an exchange economy. We define the notion of jungle equilibrium and demonstrate that standard results of competitive markets hold in the jungle as well. The second model is game theoretic. We show that being more powerful does not necessarily imply being wealthier.

Sunday, April 27, 2003
The Desert and the Jungle: Alan Schwartz and Robert Scott on Contract Theory
    Introduction Alan Schwartz (Yale) and Robert Scott (Virginia) have uploaded Contract Theory and the Limits of Contract Law, forthcoming in the Yale Law Journal. Here is the abstract:
      This article sets out a normative theory to guide decisionmakers in the regulation of contracts between firms. Commercial law for centuries has drawn a distinction between mercantile contracts and others, but modern scholars have not systematically pursued the normative implications of this distinction. We attempt to cure this neglect by setting out the theoretical foundations of a law merchant for our time. Firms contract to maximize expected surplus and the state permits markets to function because markets maximize social welfare. Thus, there is a correspondence of interest between firms and the state, which implies that, when externalities are absent, the state should implement the preferences of firms regarding the rules that regulate their contracting behavior. A contract law for firms would differ in three major respects from current contract law. First, such a law would have far fewer default rules and standards than current contract law contains. The high level of generality on which much contract law is written (e.g., a party must behave "reasonably") creates unacceptable moral hazard for parties subject to it. Thus, firms in theory should, and in practice commonly do, contract out of much of the law most of the time. The primary effect of today's law, that is, is to raise transaction costs without altering substantive behavior. Second, the default theory of interpretation that a contract law for firms would require courts to base interpretations primarily on the written texts of agreements. The risks of incorrect interpretations that such a theory creates, we argue, would be more acceptable to firms than the costs that the courts' current interpretative practices create. Third, the law would contain almost no mandatory rules. To summarize, a modern law merchant would be much smaller than current contract law; would truncate broad judicial searches for parties' true intentions when interpreting their agreements; and would accord parties much more freedom to write efficient contracts than now exists.
    Obviously, this is must reading for contract theorists.
    But What Is Going On Here I find most of Schwartz and Scott's story to be compelling. In particular, their argument for the plain meaning approach to the interpretation of commercial contracts was very persuasive. But stepping back for a moment, I find large portions of their argument puzzling or confusing--although I think I agree with their core normative positions. Let me start with their basic theoretical notions--the idea of complete contract and a default rule. Before I start my analysis, it is probably useful to lay out some of Schwartz and Scott's basic ideas and arguments. Here goes:
      A Complete Contract The first idea is that of a complete contract. The intuitive notion is that a complete contract would set out the obligations of the parties in all possible future states of the world. Schwartz & Scott rely on this idea in a number of places. Here are some examples:
        --"We now consider the case in which the parties have written a complete contract in some language." (p. 47)
        --"Incomplete contracts sometimes produce law suits because parties will not always agree ex post regarding the treatment of omitted contingencies." (p. 60)
        --"The commonly held view is that but for the cost parties would write complete contracts." (p. 62)
      A complete contract contains provisions that provide courts direction for all possible states of the world. An incomplete contract falls short of this ideal--it contains gaps that are realized in some possible states of the world or inconsistencies that are trigged in some possible states of the world or ambiguities that become manifest in some such states or it contains gaps, inconsistencies, and ambiguities--as most real world contracts do.
      Default Rules and Mandatory Rules From this picture, it follows that the law of contracts contains default rules and mandatory rules. A default rule is a rule of law that fills a gap in an incomplete contract; default rules can be overriden by the terms of a contract, and hence, if a contract is complete, it completely excludes the operation of default rules. A mandatory rule is like a default rule, except that it trumps the terms of a contract. For example, a contract that with a liquidated damages clause that called for the breaching party to forfit a pound of flesh in the event of breach would be uneforceable because it would violate a mandatory rule.
      Schwartz and Scott's Argument for Minimizing the Number of Default Rules Schwartz and Scott argue that contract law should contain very few default rules and standards. Let me quote three key paragraphs. The first sets out criteria for a good default rule. The second argues that because default rules would be too expensive, contract law relies on default standards instead. The third paragraph :
        Paragraph One, Criteria. A good default rule will condition on few possible states of the world, be relatively simple in form, and be efficient for a wide variety of contract parties. The first of these criteria is necessary because there can be an infinite number of possible future states of the world, but thestate’s drafting costs also are finite. Thus, it likely would not be cost justified to create a publically supplied rule if the rule had to contain directions for parties in many possible future states. The criterion of simplicity is a function of institutional competence. While legal rules can be complex, contract law rules are created by courts and drafters. Courts cannot conduct investigations into the efficiency properties of possible rules and rule combinations. Drafters also have limited resources.
        Paragraph Two, Costs Lead to Default Standards. Contract and commercial law thus contain very few default rules because parties are heterogeneous in modern economies, good rules sometimes must be complex, and the efficient rule may have to take many possible future states of the world or party types into account. Rather, the Restatement of Contracts and Article 2 of the UCC primarily contain standards; these texts are replete with provisions requiring parties to behave “reasonably”, “conscionably”, “fairly”, “in good faith”, and the like.
        Paragraph Three, Default Standards Are Inefficient The project of creating publicly supplied default standards is difficult to defend. A publicly supplied contract law is justified as solving problems for parties that contracting costs prevent parties from solving on their own. It is relatively costless for parties to write standards in their contracts, however. Thus, for parties to provide that the seller should deliver a “reasonable” quality level, deliver within a “reasonable” time, but be excused if its performance has become “impractical”, would exhaust few drafting resources. When a court observes the absence from a contract of a standard that would have resolved the issue at bar, then, the court should not infer that the contract has a gap that typical parties would want the court to fill. Instead, given how easy it is for parties to create standards, the best inference commonly will be that a standard is not “missing” from the contract, but rather its use has been rejected. The court therefore should not imply a standard to decide the case. And for the same reason drafters should be reluctant to enact sets of seemingly missing standards into statutes or restatements. To fill nonexistent gaps is to do for parties what parties do not want done.
      Standards don't work for three reasons. First, they are general and ambiguous (otherwise they would be rules). Second, they create a moral hazard problem, because parties have obvious incentives to interpret vague standards in their own favor. Third, because of asymmetrical information, the moral hazard problem is exacerbated. (See Legal Theory Annex for more on this argument.) In sum, then, Schwartz and Scott argue that most of the default rules provided by contract law are inefficient standards, which only increase transaction costs by forcing the parties to contract around the inefficient default rules.
      Desert Landscapes How might we capture the core intuition behind Schwartz and Scott's theory of contracts between firms? Let us analogize current contract law to a lush jungle, populated by a dense undergrowth of default standards and a forest of default and mandatory rules. For firms to build a contract in this jungle, they must hack their way through the undergrowth--cutting down default standards willy nilly and building their agreement around the many awkwardly placed mandatory rules of contract. Schwartz and Scott might be said to long for contract law that is like a desert landscape. Surveying this sparse Schwartzscottian Desert, we would see a few scattered but attractive default rules along with the rare but prickly mandatory rule, usually spied only atop a distant dune. Building a contract in the desert is cheap by jungle standards. Because the mandatory rules are few and easily avoided, it is a simple task for firms to find a suitable plot upon which they can build their agreement. The default rules that might impinge on one’s contract can be incorporated in the structure or cleared away without undue expense. The desert floor is bare and solid—already a suitable foundation for building an agreement. It is no wonder that firms would prefer to build their contracts in desert landscapes.
    Something Is Seriously Wrong With This Picture At one level, Schwartz and Scott offer an attractive picture of contract law, but there are cracks in the edifice. I want to rewind the argument. Viewed from a distance, the Schwartzscottian Desert has a sparse and elegant beauty, but on closer inspections, we begin to see that the what is smooth from far away is rough and unshapen upon closer view. Enough metaphor. On to the argument.
      Complete Contract? Incoherent Idea! Let's start with the first building block of Schwartz and Scott's analytic framework--the idea of a complete or fully specified contract. Will that dog hunt? Let's try to make the notion of a completely specified contract more precise. The method for specification will be the employment of possible-world semantics to cash out the idea of a "possible future state of the world." Once we have a clear understanding of this idea, we can move to the fully specified contract itself.
        Possible Worlds Semantics Begin with the notion of a possible world. If X is possible, we say that X occurs in some possible world. We add the notion of the "actual world"—where actual is an indexical term that picks out this world from all possible worlds. A completely specified contract need not deal with all possible worlds--only with the possible future states of the actual world. This limitation is expressed in possible world semantics via what is called an "accessibility" relation. Those possible worlds that share the history of the actual world up to now are called "historically accessible." Of course, it is logically possible that the future states of the actual world could be just about anything you can imagine; there is no logical contradiction in a possible world that shares the history of the world up until now, but that is completely empty the very next moment. We should restrict the domain of possible worlds to those that share the basic laws of nature (physics, etc.) with the actual world; these worlds are called "nomologically accessible." The historically and nomologically accessible worlds, then, are those that share the history of the actual world up to now and that share our laws of nature.
        "States of the World" and "Obligations of the Parties" We also need to define two more elements that enter into the notion of a completely specified contract: state of the world and obligations of the parties. First, stipulate that a state of a possible world is a unique time slice of that world: thus, world Wz at time Tq is at state S[WzTq]. Second, stipulate that obligations of the parties to a contract for a given state of the world will be a set of descriptions O that contains for each party, p1, p2, . . . pN, the obligation descriptions o1, o2, . . . oK that pick out the action types the occurrence of which is required by the contract. Thus, party p1's discrete obligation o1 would be p1o1. Given these definitions, a completely specified contract will take the form of a list of ordered pairs. One member of each pair will be a state of some historically and nomologically accessible possible world and the other will be a specification of the obligations of the parties for that event type. Let the equal symbol (=) represent the relationship between the two members of the ordered pair. A completely specified contract for n parties with k obligations in q time slices of z possible worlds would need to spell out all obligations of all parties for all time slices of all nomologically and historically accessible possible worlds. For just one time slice of one possible world and some number of parties N, we have
          S[WzTq]={(p1o1 & p1o2 & . . . & p1oK) & (p2o1 & p2o2 & . . . & p2oK) & . . . (pNo1 & pNo2 & . . . & pNoK).
        There are, however, an infinite number of possible worlds and a continuum of time slices of each world. Therefore, if a complete contract were to be drafted, it would be rather long. We might say that a complete contract would have an infinite number of pages and that each page would have a continuum of provisons. This is an incoherent conception; such a contract is not possible in theory but too expensive in practice. Such a contract is inconcievable.
        Default Rules? Conceptual Default! A complete set of default rules simply is a complete contract minus the particular provisions that identify the parties and their core obligations. If contract law is to provide default rules for all situations in which an actual contract falls short of the ideal of a fully specified contract, then contract law must either contain an infinite number of rules or a finite number of rules or standards that predetermine outcomes in an infinite number of cases. A core assumption of Schwart and Scott's argument is that a complete set of default rules or standards that provide determinate guidance for the resolution of cases is impossible. And they are right. The dream of a completely specified contract has taken on a nightmarish quality. It is not clear that the idea of a contract that specifies the obligations of the parties for all possible futures states of the world makes sense.
        Reconceputalizing Default Rules We need to rebuild the idea of a default rule on foundations firmer than the incoherent idea of a fully specified contract. Once we severe that tie, we can develop a workable albeit less ambitious concept. The key move is to figure out what default rules really do. My suggestion is that default rules perform three functions, or putting it a bit differently, default rules fill three kinds of gaps:
          Gap Type One. Failure to Specify Background Assumptions. The first cause for a gap might be the termed failure to specify contingent but highly probable background assumptions. For example, the contract requires payment of $10,000,000.00 on a certain date, and the obligee makes her payment by tendering 1,000,000,000 pennies. One might say that this situation exposes a "gap." The contract does not specify what will happen in the event of payment in pennies. The gap is created by a background assumption—that payment will be made by check or perhaps by $100 bill, but certainly not by pennies. The ability to contract against a background of unstated background assumptions is an absolute necessity for the enterprise of contracting to get off the ground. Without background assumptions, contracts would have no meaning. Courts must fill in the background assumptions, or they could not interpret contracts. And this leads to a very important point. Modes of contract interpretation are themselves default rules. Thus, a plaining meaning approach to contract interpretation is simply a default rule--or to be more precise a "default standard" in Schwartz and Scott's terminology.
          Gap Type Two. Contractual Generality and the Variability of Experience. Consider a second and related reason for so-called "gaps." Contracts are written in relatively general language, but human experience is enormously variable. Recall Aristotle's classic discussion of equity in Chapter Ten of Book Five of the Nicomachean Ethics:
            [A]ll law is universal but about some things it is not possible to make a universal statement which will be correct. In those cases, then, in which it is necessary to speak universally, but not possible to do so correctly, the law takes the usual case, though it is not ignorant of the possibility of error. And it is none the less correct; for the error is not in the law nor in the legislator but in the nature of the thing, since the matter of practical affairs is of this kind from the start. When the law speaks universally, then, and a case arises on it which is not covered by the universal statement, then it is right, when the legislator fails us and has erred by over-simplicity to correct the omission--to say what the legislator himself would have said had he been present, and would have put into his law if he had known.
          Aristotle is discussing the law in general, but his point is good for the norms created by a valid contract. Such norms must be stated in the relatively general and universal language, but practical affairs are particular and variable. The notion of a completely specified contract assumes that one could spell out all the rules in advance—by adding an enormous number of relatively general and universal clauses to the actual contract negotiated by the parties. But this assumption is incorrect: every attempt at a completely specified contract is doomed to failure, because the tools with which such a contract would need to be constructed—that is, the words and sentences of a natural language—are not up to the task.
          Gap Type Three. Recurring Omissions of Anticipatable Contingencies. Consider a third source of contractual gaps, the omission by the parties of an anticipatable contingency. Of course, such examples are familiar from contracts casebook. These are the garden-variety gaps with which we are all familiar. And of course the law does provide default rules for such recurring gaps. In a common law system, such gap filling by default rules is almost inevitable. The fact patters recur, opinions are published and particular rules governing omission types begin to form. One important default rule that applies to most contracts is law of contract damages--the expectation measure fills a gap in contracts without liquidated damage clauses (or other damage provisions). Even more ubiquitious is the set of rules that define the rights and obligations of the parties in the event that the contract is invalidated. Once again, the law provides a default for an anticipatable contingency--the invalidation of the contract itself. Of course, this default rule is an absolute nececessity. Although the parties could attempt to enter into a second order contract that established the consequences for invalidation of their first order contract, you have already seen that there is an infinite regress looming. What if the second order contract was not properly formed or is invalidated for some other reason? Well, the parties could form a third order contract, but . . .
      Back to Schwartz and Scott So, here is the very odd thing about Schwartz and Scott. They somehow think that a "good default rule will condition on few possible states" of the world. They say that this is "necessary because there can be an infinite number of possible future states of the world, but the state’s drafting costs also are finite." These statements are literally nonsense, because they assume an incoherent account of completeness and hence of the way default rules operate. Default rules don't condition on some number of states of the world. Every legal rule, including every contract provision or default rule/standard applies to an infinite number of possible states of the world. For every contract that can be breached, there is an infinite number of historically and nomologically accessible possible worlds in which the contract is breached and an infinite number of possible worlds in which the contract is performed. For every possible world in which breach occurs (or does not), there are a continuum of relevant states (time slices). There is no such thing as a default rule that conditions on "few possible states" of the world. The very idea is completely and utterly incoherent.
      I Have Good News and Bad News The good news first. Sure, complete and utter incoherence is not a good-making feature of theories, but in this case, there is a fix available. What Schwartz and Scott really mean is that of necessity default rules must be formulated so as to be contingent on only a few properties of the world. The problem isn't that there are an infinity of possible worlds. Rather, the problem is that each possible world can be described in an infiinite number of ways and contains a vast (but not infinite) number of entities, events, and actions. A default rule cannot be formulated as a complete description of the world. Default rules must be sparing in their formulation. When compared to the complexities of the world, legal rules are very sparse indeed. This is true even of the Internal Revenue Code--which despite its enormous complexity is vanishingly simple in comparison to the vastly complex world of human conduct it attempts to regulate in exquisitely fine-grained detail. So Schwartz and Scott are not in trouble. We might say that the surface structure of their point is incoherent but the deep structure is sound.
      And Now for the Bad New But now that we understand the nature of default rules, it turns out that that one of Schwartz and Scott's claims is self-refuting. Schwartz and Scott claim that default standards are not so hot, because the parties will try to contract around them. But there is no escaping default standards. Contracting without default standards is inconcievable, and trying to concieve of contract law without pervasive default standards is an enterprise fraught with incoherence and confusion. And so it turns out that what Schwartz and Scott are advocating is not fewer default rules or default rules that condition on fewer states of the world. What Schwartz and Scott are advocating is different default rules. So, for example, they offer an argument for a method of contract interpretation, i.e., a "textualist interpretive style, one that restricts the evidentiary base to not much more than the written." And this just is a default standard. Default because Schwartz and Scott's own arguments against mandatory rules tell us that this interpretative method should give way if the parties so stipulate. Standard because the applicability of "textualist interpretation" to particular situations is defined ex post and not ex ante (and that is how Schwartz and Scott define standards as opposed to rules).
      And One Thing More . . . One more piece of bad news. If you have gottent this far, you are probably wondering about the following question. If Schwartz and Scott advocate fewer default rules, then what will they do about the gaps? There must be some rule of law to deal with such situations--unless Schwartz and Scott would relegate the parties to self help. Here is what they say:
        What then is the proper role of courts in resolving disputes over incomplete contracts? If a contract contains a gap, a court sometimes must decide whether to create a standard or to declare the contract incomplete and thus void for indefiniteness. It would be appropriate to create a standard if the standard could satisfy the criteria set out above. If such a standard does not exist but the contract has been partly performed, so that declaring it void would create hardship, courts understandably attempt to read the contract to reach a reasonable result. It does not follow from these understandable efforts that drafters should infer default standards from the courts’ holdings. Rather, our argument holds that UCC or Restatement drafters commonly should do nothing, and that courts should be hospitable to attempts by later parties to alter or avoid earlier rules of the case.
      And of course, this is a default rule. And further, it will bring a host of other default rules into play. Parties will rely on various quasi-contract and tort theories as they seek to unwind thier relationship and determine the legal consequences of partial performance, sums paid for goods not recieved, and so forth. There is no such thing as a law of contracts without default rules or even a world where the default rules cover fewer cases. It is the nature of the relationship betwen contract and world that default rules are ubiquitious. Once we understand what default rules are and what they do, we find that they are inescabable. The Schwartzscottian Desert is beautiful but it is ultimately a mirage. Law, like life, is a jungle.
    Download Schwartz and Scott's hugely interesting article.

Freespace and Freewill Timothy Sandefur of Freespace reacts to my post from the Roundtable on Moral Luck at USD. Among other things, Sandefur praises Daniel Dennett's new book, Freedom Evolves--right on the money.

New on SSRN There are a few new papers this weekend:
    Simone Rose (Wake Forest) offers On Purple Pills, Stem Cells and other Market Failures: A Case for a Limited Compulsory Licensing Scheme for Patent Property. From the abstract:
      In an effort to balance the constitutional incentive of granting exclusive rights for "limited times" to inventors against the goal of furthering innovation and providing fair access to technology and knowledge, this paper explores options that provide greater leverage to accessing patented technology in a timely manner in situations where traditional licensing arrangements are an economic impossibility. The best illustrations of licensing bottlenecks are found in the areas of pharmaceutical/biotechnology and operations software. Here, patentees often stand to gain extraordinary profits from monopolizing the technology and little incentive to seek socially beneficial agreements in times of national crisis. With operations software, the patentee with the dominant system may delay licensing its technology and resist efforts that would result in opening the network to the entire marketplace, despite the fact that such activity would stimulate technological innovation and benefit consumers. Fair Use provisions, although attractive on the surface, lead to increased erosion of inventor incentives. This is particularly true in the area of biotechnology where start-up and research and development may become cost-prohibitive. However, the reverse doctrine of equivalents allows for infringing acts which produce radically pioneering inventions. Instead of attempting to mirror the Copyright Act's Fair Use Provisions, I advocate implementing some type of compulsory licensing scheme which can be triggered for public health, national emergency, or market failure situations. I posit that for pioneering inventions and certain types of basic research, such as stem cells, the transaction costs for negotiating and enforcing patent licenses becomes prohibitive and the incentive to abuse market pricing power is great. Overvaluing or undervaluing the market, market uncertainty, the desire to retain monopoly profits and differing goals of academic and corporate research are just a few of the scenarios which increase the costs of negotiating licenses and/or marketing patented inventions. Excessive transaction costs negate the Coasean "commons" theory that in the ideal universe of private property, minimal transaction costs will motivate parties to negotiate and share exclusive rights in a manner which leads to the most economically efficient use of resources. Instead, market failures often trigger monopoly pricing and/or an inability to negotiate traditional patent licenses. This creates a "bottle-neck" in natural free market competition, thereby preventing the true "progress and promotion" of the useful arts and science.
    Joshua Gans and Stephen King (Melbourne, Business) offer Contestability, Complementary Inputs and Contracting: The Case of Harbour Towage. From the abstract:
      It has been argued that competitive tendering can be used to overcome problems of natural monopoly and to make markets 'contestable.' The recent Productivity Commission report into harbour towage in Australia noted the potential benefits of competitive contracting. Using the example of harbour towage, we investigate these claims when competitive tendering involves one segment of a vertical production chain. We show that direct customer contracting will not result in a perfectly contestable outcome if there is a complimentary input provider with market power. In particular, contracting involves a socially sub-optimal service quality. We consider whether this situation improves when customers delegate the contracting process. In the case of harbour towage, the port authority is an obvious delegated agent for the shipping customers. But delegation only improves the outcome from the customers' perspective if the authority is able to receive side payments from the towage operators. Such side payments, a priori would appear to be against the interests of the customers. We show, however, that side-payments help the port authority to overcome the problems of market power, benefiting both the port authority and the customers. Further, these contracting outcomes are socially preferred to the unregulated outcome where port authorities and towage operators set prices and quality independently. This analysis sheds light and generally supports the Productivity Commissions recommendations.
    Daya Shanker (University of Wollongong) posts Access to Medicines, Article 30 of TRIPS in the Doha Declaration and an Anthropological Critique of International Treaty Negotiations.
    Joseph Aldy (Harvard, Economics), Scott Barrett (Johns Hopkins, School of Advanced International Studies) and Robert Stavins (Harvard, Kennedy School) upload Thirteen Plus One: A Comparison of Global Climate Policy Architectures. From the abstract:
      We critically review the Kyoto Protocol and thirteen alternative policy architectures for addressing the threat of global climate change. We employ six criteria to evaluate the policy proposals: environmental outcome, dynamic efficiency, cost effectiveness, equity, flexibility in the presence of new information, and incentives for participation and compliance. The Kyoto Protocol does not fare well on a number of criteria, but none of the alternative proposals fare well along all six dimensions. We identify several major themes among the alternative proposals: Kyoto is "too little, too fast"; developing countries should play a more substantial role and receive incentives to participate; implementation should focus on market-based approaches, especially those with price mechanisms; and participation and compliance incentives are inadequately addressed by most proposals. Our investigation reveals tensions among several of the evaluative criteria, such as between environmental outcome and efficiency, and between cost-effectiveness and incentives for participation and compliance.

Downward Spirals Department The rhetoric over the confirmation wars continues to heat up. As those with frequent blogsurf miles know, my view is that we are in a downward spiral of politicization that has dangerous long term consequences. The evidence in support of this hypothesis continues to pile up.
    Time Magazine Weighs In Time Magazine has a story (although one might be temped to call it an editorial) on the confirmation wars. Here is a brief excerpt:
      Democrats, for their part, say the filibuster is practically the only weapon they have left in the face of what they assert is a brazen attempt to stuff the nation's federal courts with highly ideological lawyers. Since most cases, while precedent-setting, never make it to the Supreme Court, they seem to have decided it's worth the fight even in the lower courts. "Never in recent memory has their been such an affront to the balance of the judiciary," said Sen. Edward Kennedy of Massachusetts, a Democratic member of the judiciary panel, where inter-party relations have sunk to a new low. "This is really an attempt to roll back any progress toward equality for all Americans."
    The story is about the nominations of Jeffrey Sutton and Carolyn Kuhl and the looming "Mother of All Battles" expected if both Rehnquist and O'Connor resign from the Court this summer.
    The Criteria for the Filibuster What are the criteria that trigger a Democratic Filibuster? Taking the Time Magazine story at face value, a filibuster is justified if the candiate is "highly ideological." How do we know that a candidate is "highly ideological"? Evidently, a three-step process of reasoning leads to this conclusion. First, from the fact that Sutton and Kuhl advocated postions X and Y as government lawyers, we can infer that they are ideologically committed to X and Y. Second, from the fact that they are ideologically committed to X and Y, we can infer that they would decide on the basis of their ideology if a case involving X and Y came before them. Third, positions X and Y are "highly ideological in nature." All three steps in this chain of reasoning are suspect. Consider the case of Jeffrey Sutton first.
    Sutton Jeffrey Sutton served as the Solicitor for the State of Ohio: Time observes that Sutton's "state's rights advocacy has helped limit the scope of disability, age and race discrimination statutes." Presumably, Time refers to positions taken by the State of Ohion in Eleventh Amendment sovereign immunity cases. The question is whether the Constitution (especially Article III's grant of judicial power and the Tenth and Eleventh Amendments) gives the states sovereign immunity from claims brought under federal laws creating private causes of actions against employers that discriminate on the basis of disability, age, or race. I am no fan of the Supreme Court's Eleventh Amendment juirsiprudence. I think that both the plain meaning of the text of the Eleventh Amendment, and the historical evidence about its original meaning are inconsistent with the key precedent, Hans v. Louisiana, and with the Supreme Court's recent decisions in cases like Seminole Tribe. But Hans has been on the books for a century, and Sutton, as the lawyer for the State of Ohio, would naturally argue the position that favored the interest of his client. The first step of the inference, from Sutton's advocacy of the interests of his client to his personal beliefs, is obviously invalid. This argument does not pass the laugh test. But even if it were correct, it does not lead to step two: if Sutton were ideologically committed to an expansive view of state sovereign immunity, it would not follow that Sutton would decide Eleventh Amendment cases on the basis of his personal political preferences. Without more evidence about Sutton's character, this argument is quite simply awful. It has no legs. What about the final step in the argument: If Sutton were ideologically committed to an pro-state's rights interpretation of the Eleventh Amendment would that make him an ideological extremist? This is actually a tricky question. Consider two possibilities: (1) If Sutton is committed to following Supreme Court precedent when he serves on the 6th Circuit, then he is simply committed to doing his job in accord with the rule of law. (2) If Sutton is committed to expanding the Eleventh Amendment protection of the states, even when such expansion is foreclosed by the Supreme Court's decisions or prior Sixth Circuit precedent, then he lacks the virtue of justice--the disposition to make judicial decisions on the basis of the law rather than personal preference. So far as I can tell, the current Democratic position does not differentiate (1) from (2). That is, Democrats are willing to filibuster candidates on the basis that they will follow Supreme Court precedent with which the Democrats agree on ideological grounds. If this is correct, it represents yet another escalatory move in the confirmation war. Opposition to Sutton on the basis of possibility number two is, of course, completely justified. But so far as I can tell, no one has produced a decent argument for two.
    Kuhl Carolyn Kuhl was the Deputy Soliciter General under Charles Fried. In that role, she was a lawyer for the United States Government (under President Reagan) in cases before the Supreme Court. She participated in the briefing for the Reagan Adminsitrations attempt to get the Supreme Court to overrule Roe v. Wade. I opposed that move. Although I think that the ultimate foundations for the original Roe decision are suspect, my view is that the Supreme Court should almost always adhere to its prior decisions. The rule of law cannot be restored by a wholesale program of overruling precedents with weak foundations. So I disagree with the Reagan administration's decision to seek the reversal for Roe. Does it follow that I should regard Carolyn Kuhl as an ideological extremist? As her boss, Charles Fried, wrote to the New York Times a few days ago, "You [the New York Times] characterize Judge Kuhl as "outside the ideological mainstream" because, among other things, she joined my brief calling Roe v. Wade an unwarranted extension of constitutional doctrine. That was also the view then of mainstream liberal scholars like Archibald Cox, John Ely and Paul Freund." This nation is deeply divided on the issue of abortion. Scholars, lawyers, and judges are deeply divided on the validity of Roe v. Wade. It is simply nonsense to argue that Kuhl is outside the mainstream because she worked on a brief that advanced the Reagan administration's position on that issue. The relevant question about Kuhl is whether her record as a Superior Court judge demonstrates that she posseses the judicial virtues. Given her background, we can be confident that she has the virtue of judicial intelligence and that she is learned in the law. But does she have good practical judgments or judicial wisdom? Does she have a judicial temperment? Most importantly, does she decide the cases that come before her on the basis of the law or does she allow ideology and personal preference to guide her decision making? I don't know enough to answer these questions, but I do know they are right questions.
Follow This Link for A Guide to My Posts on Judicial Selection and the Politicization of the Confirmation Process.

Saturday, April 26, 2003
Just My Luck, Part Three One of the nifty side benefits of doing this blog is the exposure to ideas in areas where I do very little work--for example, torts and criminal law. So I was doubly pleased with the opportunity to read and think about the late David Lewis's famous essay, "The Punishment that Leaves Something to Chance," for the Roundtable on Moral Luck at USD this morning. Lewis's essay is a fresh take on an old problem--why attempts are punished less severely than successfully completed crimes. Lewis's proposal is that the punishment of successful crimes is the equivalent of a lottery. All attempts (successful and unsuccessful) are equally blameworthy. For various reasons, we cannot or should not punish everyone who attempts. Instead, we use success as the proxy for a lottery. So both Alice and Ben attempt to impose harm H; they each have a 50% chance of success. Alice does succeed, and Ben fails. Each is equally culpable, but we punish Alice with a punishment P that is deserved for actions with a 100% chance of causing H. Ex ante, both Alice and Ben have an equal (50%) chance of P and that is what the each deserve. Michael Moore quickly demolished Lewis's argument. Among his argument is that Ben isn't really punished at all--an unrealized risk of P is no punishment at all. And if the punishment is supposed to be proportional to the culpability, then Lewis's scheme breaks down in the real world. Take Carla who acts in a way that creates a 90% risk of harm H and Dan who acts in a way that creates a 10% risk of H. Carla is more culpable than D, but both will recieve P if they succeed because both have attempted the same crime--the intional creation of harm H. This discussion got me thinking. Suppose we tweak Lewis's idea in the following way. Let's not have a punishment lottery. Let's have a mercy lottery. Give those who attempt and succeed punishment P--the punishment they deserve. Then let's conduct a mercy lottery, letting failure operate as a winning ticket in the lottery. No one gets more punishment than they deserve, although some get less. Who has a just ground to complaint? Not those who attempt and succeed: they get what they deserve. Not those who attempt and fail: they get a lighter punishment than they deserve and have no just ground for complaint. Not the victimes of crimes: those who perpetrated the offense against them are those who get the punishment they succeed. If society has instrumental reasons to conduct such a lottery, no one has a just complaint. If a mercy lottery is wrong, it must be because undeserved mercy is wrong. Daniel Markel has an interesting draft paper on this topic--but I don't think it is yet available on line.