*************** Prof. Moglen,

I'm beginning to think that the comparisons to the no-fault auto-insurance and the military draft are just too weak to really provide much meaningful discussion. I think the notion that affirmative action may actually provide efficiency gains is very interesting, but I am struggling to find where that would fit. No-fault auto-insurance is one of the only programs I'm familiar with that disregards individual responsibility in favor of efficiency. Can you suggest some other areas that might be more analogous? Alternatively, if these analogies are just too far from equal protection jurisprudence to be useful, do you think that an investigation into efficiency in relation to narrow tailoring would be fruitful?

Professor Moglen, I've decided to write a new paper. My first paper was not well organized, confused, and not salvageable.

Cost Effective Affirmative Action

Much of the criticism of affirmative action is based on the assumption that affirmative action gives preferences to less qualified candidates. Opponents argue that as a result, the optimal output is not reached because the most productive are not rewarded. Instead of challenging the assumption that less deserving candidates are rewarded or the naïve conclusion that productivity is lowered, proponents of affirmative action argue that affirmative action is justified by the societal benefits of increased diversity. In Grutter, the court held that student body diversity in higher education is a compelling government interest. But, in deferring to the university, the Court did not address whether affirmative action actually generates suboptimal performance. However, there is a good deal of economic literature that investigates the effects of affirmative action on optimal outputs. The literature finds that even assuming that only less productive competitors are subsidized, affirmative action actually increases the overall level of production by forcing unsubsidized competitors to produce more than they would in the absence of affirmative action. For example, in Deficit Reduction Through Diversity: How Affirmative Action at the FCC Increased Auction Competition, 48 Stan. L. Rev. 761 (1996) (http://digitalcommons.law.yale.edu/cgi/viewcontent.cgi?article=2520&context=fss_papers), the authors show how at the FCC’s 1993 auction for radio spectrum licenses, giving “bidding preferences [to minority owned firms] increased the government’s revenue by more than 12 percent” (763). The moral is that affirmative action, far from being costly, may actually be cost effective: “Bidding subsidies for weak bidders – far from being ‘giveaways’ – can prevent giveaways by forcing relatively strong bidders to bid close to their reservations prices” (775).

The cost effectiveness of affirmative action has never, to my knowledge, been brought before the Court as a reason for its continuation. The question is whether affirmative action’s ability to increase efficient production will have any currency with the Court? The imposition of burden just for efficiency gains seems to violate “the basic concept of our system that legal burdens should bear some relationship to individual responsibility.” Frontiero v. Richardson, 411 U.S. 677 (1973) at 686 (internal quotations omitted). Of course courts have upheld the constitutionality of various compulsory programs that burden individuals for efficiency gains. Examples from torts include workers’ compensation and no fault auto-insurance. At first, workers’ compensation was found to be an unconstitutional deprivation of property without due process because of the lack of fault in placing liability on the employer (Ives v. South Buffalo Ry. Co. (NY, 1911)). But both workers’ compensation and no fault auto-insurance are now well established programs. Courts have variously held that access to a tort remedy is not a fundamental right. Importantly, programs that protect against injury are well established under a state’s police power. A 1974 article analyzing the constitutionality of the then newly enacted New York no-fault auto-insurance law reports that other state courts found that “compulsory "no-fault" insurance is no different from any other type of self-protecting legislation, such as that which requires motorcyclists to wear safety helmets or that which requires compulsory self-insurance under the Social Security system” (http://ir.lawnet.fordham.edu/cgi/viewcontent.cgi?article=2146&context=flr). Most importantly, compulsory no-fault systems are mainly challenged on due process grounds, not equal protection grounds as with affirmative action. Most equal protection challenges to no-fault auto-insurance for example, are based on discrimination against the poor or discrimination against other collateral sources of contribution for recovery. Unlike affirmative action, equal protection challenges to no-fault auto-insurance only require rational review. There is no explicit racial classification that activates strict scrutiny, as in affirmative action. Moreover, since there is no fundamental right to tort remedies and protective measures are well within the police power, due process challenges also do not activate strict scrutiny.

Perhaps closer comparison is the military draft, a program that burdens one group of individuals (only men can be drafted) based only on gender, regardless of potential individual contribution. Although arguably closer to affirmative action than no-fault auto-insurance because it involves a clear equal protection issue, the military draft is also not a good comparison. Firstly, unequal treatment on the basis of gender only activates intermediate scrutiny. In Rostker v. Goldberg, the Court examined the constitutionality of the Selective Service System (not the actual draft were it to be reinstated) and the majority applied a milder form of intermediate scrutiny (see Marshall’s dissent), giving lots of deference to Congress in carrying out its Article I powers to raise armies. Crucially, the Court stated that men and women were not similarly situated for equal protection purposes because women are not allowed in combat positions. (The exclusion of women from combat positions was not challenged.) In the context of affirmative action, it would much more difficult to argue that minorities and non-minorities are not similarly situated for the purposes of obtaining education or jobs.

Perhaps greater efficiency benefits could pass heightened scrutiny at all. The Court held in Reed and reaffirmed in Frontiero and Craig that administrative convenience is not a sufficient justification to withstand heightened scrutiny. High costs in shifting to a non-discriminatory system are not enough to justify discrimination based on a suspect or quasi-suspect classification. The question is whether there is any difference between reducing costs and increasing productivity. Fundamentally, both affect the bottom line. It could be argued that Reed and Frontiero stand for the proposition that the government cannot fail to remedy discrimination just because the remedy is costly. If this is true, surely the government cannot discriminate to generate profits.

It seems unlikely that the cost-effectiveness of affirmative action is enough to independently justify the program. However, it may help to further support diversity as a compelling government interest. Specifically, cost-effectiveness may show that affirmative action programs are more narrowly tailored than previously thought. The dissents in Grutter advocate percentage plans like those used in California and Texas because they produce similar student body diversity. These plans, however, would not increase the overall level of productivity they are based solely on the existing level of competition. Affirmative action, then, would be less replaceable and thus more narrowly tailored.

Legal Standards

This paragraph is confusing. "Objective" is not a synonym for "arbitrarily rigid," and the presence of doctrines of mistake or duress indicates lines of factual distinction among relevantly dissimilar situations, not the division of society into "communities" of people or mores.

Some laws are more explicit about the need for a referential community than others. In defamation law, whether a statement is defamatory depends whether the statement harms the reputation of the individual in her community. Courts often rely on a “right-thinking” or a “substantial and respectable minority” standard to define the community.

This is not an accurate statement of law. The root of defamation, as of all civil liability, is harm. Harm must be specially shown, historically, as loss of business, exclusion from social affairs, etc. Certain classes of words were presumed to cause harm, and those presumptions were joined, for historical reasons based in procedure and political control, with a general rule that harm need not be specially proved in cases of "libel," that is, published writings. The law also historically considered the issue of harm to be determined in relation to the plaintiff's particular condition: some people, the common law has always considered, have no reputation to lose. In this context only, as an evidentiary question solely, might the question of "community" arise.

In Abigail A. Rury, He’s So Gay…Not That There’s Anything Wrong With That: Using a Community Standard to Homogenize, 17 Cardozo Journal of Law and Gender 665 (2011), Rury asks the interesting question of how courts should decide whether false imputation of homosexuality is defamation. She states that courts should follow the example of Albright v. Morton, 321 F. Supp. 2d 130 (D. Mass. 2004) and Stern v. Cosby, 645 F. Supp. 2d 258 (S.D.N.Y. 2009) by identifying the relevant community by looking at public opinion polls, testimony, legislation, and case law.

If the question is interesting, it must be for some reason you do not make clear to the reader. The issue is a matter of fact for the jury: did a false statement cause harm? Even if harm is presumed, its extent is an issue in proof of damages, and that evidence should be admitted which is relevant. Whether a law student is right in judging whether some trial courts did or did not suitably weigh the evidence in bench trials seems to me of no substantial interest whatever.

This assumes that "a standard for determining community" exists and is relevant to the decision of cases. I think that's nonsense, and nothing said here is persuasive to the contrary.

This graf makes no sense whatever to me.

But assuming courts can accurately gauge the values of the community, having transparency in creating legal standards gives rise to the problem that knowing how standards are set, people will reorganize communities so that each person only lives with those whose values they share.

This appears to suggest that we are suddenly talking about geographic communities. Even the nebulous and probably irrelevant matters that seemed to be under discussion in the last paragraph were at least clearly not physical communities: they were, to the best I could discern, communities of reputation, the circles in which one travels, in which it either is or is not harmful to be inaccurately described as homosexual.

The law, being able to accurately recognize these values and respecting them, will only enact laws reinforcing pre-existing social values. We know that even people with the slightest preferences move to insulated communities that reflect those preferences even without legal incentives (Schelling’s checkerboard model of racial discrimination), so such a reorganizing in response to legal transparency may happen.

The phrase "legal transparency" sounds big, but evidently means something little, like "courts explaining what they are doing when they decide whether particular words or phrases are harmful to the reputation of others." Are you actually talking about whether people will move themselves from one house or school district to another in order to cluster among people who are likely to share their values, thus rendering them more likely to collect damages if someone falsely describes them as homosexual? Despite how unlikely this seems, it is not clear what else you could mean, after all this windup.

But beyond the obvious problems that small, legally-empowered, segregated communities engender, there is a question of what the law actually does in a situation like this. Here, the law does no more than codify pre-existing and extremely strong social norms in very insular, self-segregating communities. Here extra-legal norms would dominate and the marginal benefit of the law is likely very low and likely much lower than the marginal cost of enforcing or creating the law. The law would not even be worthwhile. So it seems that either the law is not transparent and risks imposing standards from one community by judicial fiat on groups of individuals from another, which offends our notion of fairness; or the law is too transparent and fairly imposes the right standards but does not really need to.

This makes less sense to me than the last graf. I don't even know how to frame an unlikely interpretation of these sentences.

The real world of course is more complex and lies somewhere in between the two extremes.

What extremes?

Now that I think about it, this thought experiment essentially just illustrates an application of the Coase Theorem that shows the irrelevance of the assignment of legal rights in a world without transaction costs.

Maybe that's what you think about, but you certainly haven 't made clear to the reader why she should think about that here. What does any of this have to do with showing that transactions costs are important in understanding the effects of legal liability rules or property allocations?

It is unrealistic to take away the costs of people relocating in response to legal transparency and the costs that prevent accurate representation of a community’s interests. But another transaction cost that we assumed away is the opaqueness in legal standard making. This, however, is something that unlike the greater societal transactions costs, the courts could readily unwind. But by lifting the veil (and assuming away certain costs), we begin to wonder what the law actually does. Is it just a function of an imperfect market? Are there already pockets efficient enough that some laws there should be rescinded but they survive as tentacles of an ancient monolith? Perhaps, in which case revealing the tricks ruins the magic show. (965 words)

I don't know what this essay is about. It is not accurate where it is clear, and mostly it is not clear enough to be inaccurate, either. A pretty thorough rewrite based on a carefully edited new outline is called for.

*

Legal Standards*

-- By AlexWang - 15 Feb 2012

Justice has never been objective, but we have the pleasing image of it as an immutable Platonic form because we have a notion that justice should be fair. Lady Justice wears a blindfold to be unbiased so as to mete out justice fairly, between the parties. We would like to have one single, objective form of justice because having one standard is fair for everyone. But what is fair for one person is not fair for another and so there are different standards the law uses. We are all familiar with the varying standards embodied in doctrines like excuse, mistake, duress, mental illness, misrepresentation, etc., and we are comfortable with the law having different standards for different people because those standards are fair to the people to which they apply. What is legally fair to the mentally handicapped is the same was what is fair for the non-handicapped. Fairness seems primarily to be that those “similarly situated” are treated the same. Justice then is obviously not objective in the sense of being the same for all people, but depends fundamentally on the community for which standards are adopted.

Some laws are more explicit about the need for a referential community than others. In defamation law, whether a statement is defamatory depends whether the statement harms the reputation of the individual in her community. Courts often rely on a “right-thinking” or a “substantial and respectable minority” standard to define the community. In Abigail A. Rury, He’s So Gay…Not That There’s Anything Wrong With That: Using a Community Standard to Homogenize, 17 Cardozo Journal of Law and Gender 665 (2011), Rury asks the interesting question of how courts should decide whether false imputation of homosexuality is defamation. She states that courts should follow the example of Albright v. Morton, 321 F. Supp. 2d 130 (D. Mass. 2004) and Stern v. Cosby, 645 F. Supp. 2d 258 (S.D.N.Y. 2009) by identifying the relevant community by looking at public opinion polls, testimony, legislation, and case law. This approach would seem to accord with Holmes’s position that judges should talk about what they are trying to do and less about the logic of rules in that this is exactly the type of approach that would help prevent decisions by judicial fiat and whose transparency would enable us to better see the social forces a court were trying to balance. By being transparent in the definition of a legal community and thus being transparent in setting the standard, reliance on evidence of self-identification would prevent ex post rationalization.

There are of course a few problems with this method. One issue is how trust worthy the evidence the court uses is as a reflection of the community’s standards. Imposing standards on a “substantial and respectable minority” that they have not in any way consented to or believe in seems patently unfair (the community standard problem of defamation in the first place). Perhaps public opinion polls and testimony to be more reflective of community standards, but how much can we trust legislation and case law becomes a question of how much we trust the representative power of the political process. Undoubtedly, the poor are almost always subject to rules made by those with resources to lobby and litigate cases. Opinion polls and open court testimony and depositions maybe skewed from only attracting certain members of the community and not others.

But assuming courts can accurately gauge the values of the community, having transparency in creating legal standards gives rise to the problem that knowing how standards are set, people will reorganize communities so that each person only lives with those whose values they share. The law, being able to accurately recognize these values and respecting them, will only enact laws reinforcing pre-existing social values. We know that even people with the slightest preferences move to insulated communities that reflect those preferences even without legal incentives (Schelling’s checkerboard model of racial discrimination), so such a reorganizing in response to legal transparency may happen. But beyond the obvious problems that small, legally-empowered, segregated communities engender, there is a question of what the law actually does in a situation like this. Here, the law does no more than codify pre-existing and extremely strong social norms in very insular, self-segregating communities. Here extra-legal norms would dominate and the marginal benefit of the law is likely very low and likely much lower than the marginal cost of enforcing or creating the law. The law would not even be worthwhile. So it seems that either the law is not transparent and risks imposing standards from one community by judicial fiat on groups of individuals from another, which offends our notion of fairness; or the law is too transparent and fairly imposes the right standards but does not really need to.

The real world of course is more complex and lies somewhere in between the two extremes. Now that I think about it, this thought experiment essentially just illustrates an application of the Coase Theorem that shows the irrelevance of the assignment of legal rights in a world without transaction costs. It is unrealistic to take away the costs of people relocating in response to legal transparency and the costs that prevent accurate representation of a community’s interests. But another transaction cost that we assumed away is the opaqueness in legal standard making. This, however, is something that unlike the greater societal transactions costs, the courts could readily unwind. But by lifting the veil (and assuming away certain costs), we begin to wonder what the law actually does. Is it just a function of an imperfect market? Are there already pockets efficient enough that some laws there should be rescinded but they survive as tentacles of an ancient monolith? Perhaps, in which case revealing the tricks ruins the magic show. (965 words)