Author: Gerard Magliocca

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The Advantages and Disadvantages of Rewards

In my last post I explained that the state sometimes offers money or status (a reward) to regulate behavior instead of imposing sanctions or granting property rights.  Now let me explain the pros and cons of this approach.

On the positive side, a reward is almost always less intrusive than sanctions.  The best example is the difference between the draft (or any compulsory labor) and the volunteer military.  While in that case offering inducements is the more expensive option, in many instances rewards are also a cheaper form of regulation because their enforcement costs are insignificant compared to criminal law, tort law, or property rights.  When I discuss the lack of a “Good Samaritan” duty in common-law tort with my students, I point out that the high costs of imposing such a duty (both from a libertarian and a litigation standpoint) compare unfavorably to maritime salvage doctrine, which rewards rescuers rather than going after those who are indifferent.  Finally, a reward is more transparent than the regulatory alternatives, both because the cost of the policy can be measured easily (and often ex ante) and because enforcement costs are low.

What are the downsides of rewards?  First, they are susceptible to fraud.  Any time you offer a pot of money con artists will come out of the woodwork, in part because the value of success is so clearly defined and the costs of applying are pretty low (unlike, say, in litigation).  Second, the state must establish the value of the reward, and that is often very difficult.  For example, few people would suggest that the state should buy inventions or books in lieu of granting a property right for them, because there would be almost no way to know how much they are worth.  Finally, there are many situations in which people simply feel that a reward is inappropriate because citizens have a duty to do what the state wants them to do.  We could (as I’ll point out in a subsequent post) increase tax collection through a reward system, but many would object on the grounds that people should pay their taxes even if, in practice, many don’t — not be rewarded for doing so.

In the next post, I’ll talk about some factors that shape the scope of rewards and role that transaction costs play in the decision to use them.

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Defining Rewards

Last year I briefly discussed a project that I’m working on that treats “rewards” as a distinctive legal category.  Well, I’m still working on it, but I thought I would do a series of posts about this topic, as I’m getting close to writing up my work.

What do I mean by rewards?  I’m referring to money or status that is given by the state, acting in its regulatory capacity, to induce socially valuable behavior.  As a result, I am excluding rewards by private parties (“Find my lost cat and I’ll give you $50″), property rights (e.g., patents or copyrights), or state action as an employer (“Sally did a great job — give her a raise.”)  The distinction with property rights is conceptual, as rewards are closely related to liability rules because the state establishes the valuation.  The other exclusions are a matter of convenience, though I’m also unsure that there is anything distinctive about private rewards or how the state acts as an employer.

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The Limits of Intellectual Property

The recent dustup between the NFL and T-shirt producers in New Orleans over who owns the phrase “Who ‘Dat?” — a rallying cry for the Saints — illustrates an important limiting principle for intellectual property — adverse public relations.  (Full Disclosure:  I live in Indianapolis.  Go Colts!)

The NFL initially said that its trademark  registration of “Who Dat?” prohibited the sale of unauthorized merchandise with that phrase.  This claim was rather broad given that the phrase probably was used in New Orleans long before the league obtained its registration in 1988.  In any event, the cease-and-desist letters sent by the NFL led to public outrage and a subsequent “clarification” that the league was referring only to merchandise that could be confused with official apparel.

While the formal rights accorded to patents, copyrights, and trademarks are sweeping, in practice they cannot be enforced to their limits because that would alienate potential customers.  The suits brought by the music studios against illegal downloads were largely abandoned for this reason.  Of course, there are many situations where shining the light of publicity on litigation will not deter someone from enforcing IP rights.  Nevertheless, counsel representing someone who is the target of such a suit — especially when the defendant is David fighting Goliath — would be well-advised to concentrate on their media strategy rather than on their legal one.

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President’s Question Time

The President’s public joust with House Republicans last week was widely praised and might set a useful precedent.  During the 2008 campaign, John McCain pledged that he would regularly engage in something like “Prime Minister’s Question Time.”  Perhaps this means that there is a nascent consensus developing that the opposition party should have some formal (or well-established informal) role in holding the White House to account even when they are in the minority.  In this vein, I want flag David Fontana’s new article on “Government in Opposition,” which draws on European constitutional practice to make this point.

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Pirates and Terrorists

Officials in Washington are still struggling with how to deal with the alleged terrorists detained in Guantanamo.  One day the issue is whether some of them should be tried in a civilian court and, if so, where?  Another day the question is whether, and how, they should be tried by military commissions.  And then there is the thought that some of the detainees should just be held indefinitely without trial.

The most fruitful analogy for thinking about this problem comes from piracy.  (Eugene Kontorovich has an excellent paper on the modern aspects of this comparison coming out in California Law Review.)  Pirates and terrorists are both irregular enemies (or unlawful combatants) whose actions are clearly condemned by international law.  So I thought I would talk about the British experience with suppressing piracy to see what we might learn about dealing with alleged terrorists.

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The State of the Union

If you watch a replay of the speech, you will see that when the President describes Citizens United as “opening the floodgates” of corporate money in politics, the camera pans and Justice Alito clearly says, “No.  That’s not true.”

UPDATE:  I guess that’s the judicial way of saying “You Lie.”

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Summer Programs in China and Croatia

I’m the co-director of the China Summer Law Program at Indiana University School of Law — Indianapolis, and I wanted to put in another plug to those who might be interested in China or in our summer  program in Croatia.  The China course is held at Renmin University in Beijing and runs from the third week of May until the third week of June.  We offer an overview of Chinese law taught by the faculty that focuses mostly on commercial subjects but also covers criminal and public law.  Learning about a legal system that is still under construction is fascinating, as is living in China and interacting with Chinese law students.  The Croatia program is held in Dubrovnik (a sun-splashed city on the Adriatic) from late June until mid-July and concentrates on Central and Eastern European law.

The link to the information on the China program is here.  The Croatia link is here.  They are both exciting opportunities and I hope you’ll consider applying.  Applications are due in March.

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Worst Constitutional Law Movie Ever

When we think about the best legal movies ever, some candidates leap to mind immediately (“Twelve Angry Men,” “A Civil Action,” “Anatomy of a Murder,”  “Body Heat,” (well, sort of)). What about the best movies about constitutional law?  That’s a tougher one.  You could say “Amistad” or “1776” (sort of).  Perhaps you have other nominees.

There is no doubt in my mind, though, that the worst constitutional law movie is “Tennessee Johnson,” a 1942 biography of Andrew Johnson starring Van Heflin as the President and a sneering Lionel Barrymore as Thaddeus Stevens.  This film comes straight out of the Dunning School interpretation of Reconstruction, by which I mean that Johnson is depicted as the hero and the Radical Republicans as the bad guys.  Moreover, the scenes involving Johnson’s impeachment trial are pretty ludicrous, especially when Johnson defends himself in the well of the Senate (which never happened) and a dying Senator casts the decisive vote for acquittal (that didn’t happen either).

Johnson is one of those rare historical figures who started out as a man of honor (for being the only Southern Senator to reject secession), then became a creep (for blocking the Fourteenth Amendment), went back to being praised (during the Jim Crow era), and then back to being considered terrible.

UPDATE:  Over on Volokh, a commenter points out that Gabriel Over the White House was worse.  I think that’s probably right, though I must admit that I’ve only read about that movie — never seen it.

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Ideas that Don’t Work

Believe it or not, some of my ideas are terrible.  Students or new scholars may have the false impression that people who write a lot never mess up or hit their heads against the wall in frustration.  So I thought I’d talk a little about why, as far as I can tell, some articles work and others do not.

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