10 10/9/00 DRAFT-DO NOT CITE WITHOUT PERMISSION VOL # additional question of fairness. To some extent, the above evolutionary arguments support the notion that the common law is fair. In a world with perfect information and zero transaction costs rational, fully-informed judges would resolve disputes in a manner that both maximized not only the welfare of the parties to the dispute, but that of society as a whole. If they did not, the argument goes, parties in future disputes(or affected non-parties) would point out the ill effects of a particular decision, and a rational, fully-informed judge would alter the applicable common law legal rule. If some judges were irrational or ill informed, parties would find other, better judges Notwithstanding these weaknesses, there are strong arguments that the common law is a fair method of dispute resolution because it protects parties' expectations. The credibility of common la djudication is based on the notion of replicability, i.e., that courts employ consistent methodologies across cases. Numerous scholars and commentators have focused on the preservation of expectations through replicable decision-making as justifying the fairness of common law. Melvin Eisenberg has noted that disputes in the U. s during the nineteenth century often relied on usages, and therefore by definition depended on the behavior and expectations of private parties. Justice Cardozo believed in the general rule of following precedent to ensure that private parties'rights and beliefs would be protected in an evenhanded, consistent, and fair manner. Jeremy Bentham -an opponent of common law generally - advocated a predictable judicial framework to protect parties' expectations, saying that"the business of the Judge is to keep the distribution of valuables and of rewards and punishments in the course of expectation. Holmes, in his story about the judge in the churn redistribution scenarios underlying the normative force of Kaldor-Hicks efficiency he weaknesses of this argument are addressed in detail in Part Il. B. For now, it is sufficient to note that judges might be irrational and typically do perfect information. See discussion infra at Part V.B. Moreover, privat e TULLoCk, supra See EISENBERG, supra note 2, at 38(describing courts adopting miners' usages as rules of law in mining claims, and whalers usages as rules of law disputes of the property rights of harpooned whales) e Mark D. Hinderks Steve A Leben, Restoring the Common in the La: A Proposal for the Elimination of Rules Prohibiting the Citation of Unpublished "The deference is that due to the determination of former judgments s due not to their wisdom, but to their authority: not in compliment to dead mens vanity Egal consequences of an act before they do it: that public expectation may knof a but in concern for the welfare of the living. That men may be enabled to predict what course it has to take: that he who has property may trust to have it still: that he ho meditates guilty may look for punishment, and in the self same guilty for the same punishment.. Why should decisions be uniform? Why should succeeding ones be such as to them? Not because it ought to have been established but because it is established The business of the Judge is to keep the distribution of valuables and of rewards d punishments in the course of expectation: conformable to what the expectation f men concerning them is, or if apprised of the circumstances of each case, as he is he supposes would be. Jeremy Bentham, A Comment on the Commentaries, in A COMMENT ON THE COMMENTARIES AND A FRAGMENT ON GOVERNMENT 196-97J H Burns H.L. A. Hart eds, 1977)
10 10/9/00 DRAFT – DO NOT CITE WITHOUT PERMISSION [VOL. #:# additional question of fairness. To some extent, the above evolutionary arguments support the notion that the common law is fair. In a world with perfect information and zero transaction costs, rational, fully-informed judges would resolve disputes in a manner that both maximized not only the welfare of the parties to the dispute, but that of society as a whole. If they did not, the argument goes, parties in future disputes (or affected non-parties) would point out the ill effects of a particular decision, and a rational, fully-informed judge would alter the applicable common law legal rule. If some judges were irrational or ill informed, parties would find other, better judges.43 Notwithstanding these weaknesses, there are strong arguments that the common law is a fair method of dispute resolution because it protects parties’ expectations. The credibility of common law adjudication is based on the notion of replicability, i.e., that courts employ consistent methodologies across cases.44 Numerous scholars and commentators have focused on the preservation of expectations through replicable decision-making as justifying the fairness of common law. Melvin Eisenberg has noted that disputes in the U.S. during the nineteenth century often relied on usages, and therefore by definition depended on the behavior and expectations of private parties.45 Justice Cardozo believed in the general rule of following precedent to ensure that private parties’ rights and beliefs would be protected in an evenhanded, consistent, and fair manner.46 Jeremy Bentham – an opponent of common law generally – advocated a predictable judicial framework to protect parties’ expectations, saying that “[t]he business of the Judge is to keep the distribution of valuables and of rewards and punishments in the course of expectation.”47 Holmes, in his story about the judge in the churn redistribution scenarios underlying the normative force of Kaldor-Hicks efficiency may not occur. 43 The weaknesses of this argument are addressed in detail in Part II.B. For now, it is sufficient to note that judges might be irrational and typically do not have perfect information. See discussion infra at Part V.B. Moreover, private parties may face transaction costs or other insurmountable obstacles in finding better judges. 44 See TULLOCK, supra note 23, at 3. 45 See EISENBERG, supra note 2, at 38 (describing courts adopting miners’ usages as rules of law in mining claims, and whalers’ usages as rules of law in disputes of the property rights of harpooned whales). 46 See Mark D. Hinderks & Steve A. Leben, Restoring the Common in the Law: A Proposal for the Elimination of Rules Prohibiting the Citation of Unpublished Decisions in Kansas and the Tenth Circuit, 31 WASHBURN L.J. 155, 171 n.96 (1992). 47 “The deference is that due to the determination of former judgments is due not to their wisdom, but to their authority: not in compliment to dead men’s vanity, but in concern for the welfare of the living. That men may be enabled to predict the legal consequences of an act before they do it: that public expectation may know what course it has to take: that he who has property may trust to have it still: that he who meditates guilty may look for punishment, and in the self same guilty for the same punishment. . . . Why should decisions be uniform? Why should succeeding ones be such as to appear the natural and expected consequences of those preceding them? Not because it ought to have been established, but because it is established. . . . The business of the Judge is to keep the distribution of valuables and of rewards and punishments in the course of expectation: conformable to what the expectation of men concerning them is, or if apprised of the circumstances of each case, as he is, he supposes would be.” Jeremy Bentham, A Comment on the Commentaries, in A COMMENT ON THE COMMENTARIES AND A FRAGMENT ON GOVERNMENT 196-97 (J.H. Burns & H.L.A. Hart eds., 1977)
SYNTHETIC COMMON LAW case, hinted that the result is apocryphal any judge would resolve a dispute about a damaged churn in a sensible way, in line with the parties expectations Finally, recent empirical work in psychology supports conclusion that there are non-economic reasons to believe common law adjudication is fair to the parties involved. Common law djudication gives parties the thing they seem to desire most: their ology literature suggest tha disputants believe having a chance to describe their version of the story to an impartial adjudicator is the most important factor determining whether they perceive a particular process of dispute resolution as"fair. In fact, this"day in court" factor outweighs every other variable tested, including the actual outcome of the dispute. If these studies are correct, to the extent the common lav is perceived as fair, it generates greater happiness among disputants than would a system that did not give parties the opportunity to air 2. The Supply of Legal Rules A common law approach provides a second, equally valuable function. Courts add to and enrich the supply of legal rules in a way that reflects the values of society. Thus, a key advantage to a common law approach is that judicial rules evolve slowly as a flexible response to the actions and preferences of individuals and institutions involved in disputes. As such rules evolve, those parties, as well as other non-parties who learn of the rules, can live and plan accordingly. Then, other individuals and institutions are involved in the next round of cases, which generates the next set of legal rules and so forth all reflecting the behavior and values of societ Several scholars have concluded that the common law upholds the rule of law more effectively than civil law because of its flexibility coupled with the stickiness"of precedent. Implicit in this argument is a distrust of the democratic process: the notion is that judges with life tenure are able to resolve disputes in an impartial manner, and therefore are better at generating legal rules than See supra note 15 and accompanying text See, e.g, Tom R. Tyler, et al., The Two Psychologies of Conflict resolution Differing Antecedents of Pre-Experience Choices and Post-Experience evaluations. 2(2)GROUP PROCESSES AND INTERGROUP RELATIONS99(1999)(describing these studies) However, the fact that disputants believe common law adjudication is fair overweight the benefits of being heard in an apparently far tants might irrationally ocess, in reality, the process might be unfair See id Some scholars have argued that the behavior of parties in those relatively few cases that involve a published decision are not representative of the behavior of other parties. I consider these arguments infra at Part Il. B I ee.g. F.A. HAYEK, LAW. LEGISLATION AND LIBERTY. LAW, LEGISLATION AND LIBERTY: A NEW STATEMENT OF THE LIBERAL PRINCIPLES OF JUSTICE AND POLITICAL ECoNOMY(1983)(arguing that common law is preferable to civil law because sative rules are both less flexible in form and more susceptible to sudden change); EISENBERG, supra note 2, at 6(arguing that common law courts should play the role of developing the rule of law on a case-by-case basis)
2000] SYNTHETIC COMMON LAW 11 case,48 hinted that the result is apocryphal: any judge would resolve a dispute about a damaged churn in a sensible way, in line with the parties’ expectations. Finally, recent empirical work in psychology supports a conclusion that there are non-economic reasons to believe common law adjudication is fair to the parties involved. Common law adjudication gives parties the thing they seem to desire most: their day in court. Recent studies in the psychology literature suggest that disputants believe having a chance to describe their version of the story to an impartial adjudicator is the most important factor determining whether they perceive a particular process of dispute resolution as “fair.” In fact, this “day in court” factor outweighs every other variable tested, including the actual outcome of the dispute.49 If these studies are correct, to the extent the common law is perceived as fair, it generates greater happiness among disputants than would a system that did not give parties the opportunity to air their views. 50 2. The Supply of Legal Rules A common law approach provides a second, equally valuable, function. Courts add to and enrich the supply of legal rules in a way that reflects the values of society.51 Thus, a key advantage to a common law approach is that judicial rules evolve slowly as a flexible response to the actions and preferences of individuals and institutions involved in disputes.52 As such rules evolve, those parties, as well as other non-parties who learn of the rules, can live and plan accordingly. Then, other individuals and institutions are involved in the next round of cases, which generates the next set of legal rules, and so forth, all reflecting the behavior and values of society. Several scholars have concluded that the common law upholds the rule of law more effectively than civil law because of its flexibility, coupled with the “stickiness” of precedent.53 Implicit in this argument is a distrust of the democratic process: the notion is that judges with life tenure are able to resolve disputes in an impartial manner, and therefore are better at generating legal rules than 48 See supra note 15 and accompanying text. 49 See, e.g., Tom R. Tyler, et al., The Two Psychologies of Conflict Resolution: Differing Antecedents of Pre-Experience Choices and Post-Experience Evaluations, 2(2) GROUP PROCESSES AND INTERGROUP RELATIONS 99 (1999) (describing these studies). 50 However, the fact that disputants believe common law adjudication is fair does not necessarily dispose of the fairness question: disputants might irrationally overweight the benefits of being heard in an apparently fair process; in reality, the process might be unfair. 51 See id. 52 Some scholars have argued that the behavior of parties in those relatively few cases that involve a published decision are not representative of the behavior of other parties. I consider these arguments infra at Part II.B.1. 53 See, e.g., F.A. HAYEK, LAW, LEGISLATION AND LIBERTY, LAW, LEGISLATION AND LIBERTY: A NEW STATEMENT OF THE LIBERAL PRINCIPLES OF JUSTICE AND POLITICAL ECONOMY (1983) (arguing that common law is preferable to civil law because legislative rules are both less flexible in form and more susceptible to sudden change); EISENBERG, supra note 2, at 6 (arguing that common law courts should play the role of developing the rule of law on a case-by-case basis)
12 10/9/00 DRAFT-DO NOT CITE WITHOUT PERMISSION VOL# legislators, who may be captured by particular individuals or institutions $4 Also implicit in this argument is the notion that common law legal rules evolve over time to reflect the values and practices of society in a more current and accurate manner than statutes can Common law is passive and evolves in response to changes in the behavior of disputants. Common law rules are more adaptable than codified rules. As society changes judges can quickly" alter the relevant legal rules. Statutes, in contrast, are fixed and difficult to change. The legislature would find it too costly and burdensome to make similar, quick changes to reflect changes in society. Legislation often cannot anticipate future controversies, especially in rapidly changing areas of practice. Legislation necessarily is active, and action requires time and is subject to the political process On the other hand, because common law rules are"sticky, judges lay not change them simply based on a whim. Change must be incremental, requires careful analysis, and is subject to review. In contrast, the legislature, when it is moved to act, may act immediately and on its own, with only that analysis individual politicians facing reelection think necessary, even if the legislative action directly reverses prior law Interestingly, several legal scholars recently have argued that in the area of rapidly evolving technologies-particularly involving telecommunications and the Internet-common law is uniquely able to generate timely rules to govern the actions of sophisticated parties. Melvin Eisenberg has argued that courts, not legislatures have a unique capacity to generate the large body of legal rules a technologically advanced society needs to do its business. Bruce EISENBERG, supre S5 See M. Stuart Madden, The Vital Common Law: Its Role in a Statutory Age, 18 U ARK. LImnE RoCK L. 555(1996)(arguing that an advantage of the common law is Many court systems have implemented so-called"fast track"or"rocket docket"approaches, to speed the resolution of individual cases. See Chris A Carr Michael R Jencks, The Privatization of Business and Commercial Dispute Resolution: A Misguided Policy Decision, 88 KY. L.J. 183, 197 n. 34 (2000)(citing several articles describing such systems). Other courts, such as those in the Southern District of New York, resolve cases more slowly, and instead spend more LET COMMON RULE THE TELECOSM8, 206(1997); Frank H. Easterbrook, Cyberspace and the Law of the Horse, 1996 U CHI. LEGAL F 207, 216(1996); Lawrence Lessig, The Path of Cyberlaw, 104 Y ALE LJ. 1743, 1752(1995). I explicitly consider arguments about the viability of common law as compared to statutory or civil law infra at Part IlL.A. Our society has an enormous demand for legal rules that actors can live lan, and settle by. The legislature cannot adequately satisfy this demand. The capacity of a legislature to generate legal rules is limited, and much of that capacity must be allocated to the production of rules concerning governmental matters, such as spending, taxes, and administration, rules that are regarded as beyond the courts competence, such as the definition of crimes; and rules that are best administered by a bureaucratic machinery, such as the principles for setting the rates charged by regulated industries. Furthermore, our legislatures are normally not staffed in a manner that would enable them to perform comprehensively the function of establishing law to govern action in the private sector. Finally, in many areas the flexible form of a judicial rule is preferable to the canonical form islative rule. Accordingly, it is socially desirable that the courts should act to enrich that supply of legal rules that govern.. [business] conduct-not by taking on
12 10/9/00 DRAFT – DO NOT CITE WITHOUT PERMISSION [VOL. #:# legislators, who may be captured by particular individuals or institutions.54 Also implicit in this argument is the notion that common law legal rules evolve over time to reflect the values and practices of society in a more current and accurate manner than statutes can. Common law is passive and evolves in response to changes in the behavior of disputants. Common law rules are more adaptable than codified rules.55 As society changes judges can quickly56 alter the relevant legal rules. Statutes, in contrast, are fixed and difficult to change. The legislature would find it too costly and burdensome to make similar, quick changes to reflect changes in society. Legislation often cannot anticipate future controversies, especially in rapidly changing areas of practice. Legislation necessarily is active, and action requires time and is subject to the political process. On the other hand, because common law rules are “sticky,” judges may not change them simply based on a whim. Change must be incremental, requires careful analysis, and is subject to review. In contrast, the legislature, when it is moved to act, may act immediately and on its own, with only that analysis individual politicians facing reelection think necessary, even if the legislative action directly reverses prior law. Interestingly, several legal scholars recently have argued that in the area of rapidly evolving technologies – particularly involving telecommunications and the Internet – common law is uniquely able to generate timely rules to govern the actions of sophisticated parties.57 Melvin Eisenberg has argued that courts, not legislatures, have a unique capacity to generate the large body of legal rules a technologically advanced society needs to do its business.58 Bruce 54 See EISENBERG, supra note 2, at 4-5. 55 See M. Stuart Madden, The Vital Common Law: Its Role in a Statutory Age, 18 U. ARK. LITTLE ROCK L.J. 555 (1996) (arguing that an advantage of the common law is its adaptability). 56 Many court systems have implemented so-called “fast track” or “rocket docket” approaches, to speed the resolution of individual cases. See Chris A. Carr & Michael R. Jencks, The Privatization of Business and Commercial Dispute Resolution: A Misguided Policy Decision, 88 KY. L.J. 183, 197 n.34 (2000) (citing several articles describing such systems). Other courts, such as those in the Southern District of New York, resolve cases more slowly, and instead spend more time writing a smaller number of careful, often lengthy, opinions. 57 See PETER HUBER, LAW AND DISORDER IN CYBERSPACE: ABOLISH THE FCC AND LET COMMON RULE THE TELECOSM 8, 206 (1997); Frank H. Easterbrook, Cyberspace and the Law of the Horse, 1996 U. CHI. LEGAL F. 207, 216 (1996); Lawrence Lessig, The Path of Cyberlaw, 104 YALE L.J. 1743, 1752 (1995). I explicitly consider arguments about the viability of common law as compared to statutory or civil law infra at Part III.A. 58 “Our society has an enormous demand for legal rules that actors can live, plan, and settle by. The legislature cannot adequately satisfy this demand. The capacity of a legislature to generate legal rules is limited, and much of that capacity must be allocated to the production of rules concerning governmental matters, such as spending, taxes, and administration, rules that are regarded as beyond the court’s competence, such as the definition of crimes; and rules that are best administered by a bureaucratic machinery, such as the principles for setting the rates charged by regulated industries. Furthermore, our legislatures are normally not staffed in a manner that would enable them to perform comprehensively the function of establishing law to govern action in the private sector. Finally, in many areas the flexible form of a judicial rule is preferable to the canonical form of a legislative rule. Accordingly, it is socially desirable that the courts should act to enrich that supply of legal rules that govern . . . [business] conduct – not by taking on
SYNTHETIC COMMON LAW Keller has pointed to the emergence of common law in intellectual property disputes, where a statutory regime, especially given a sluggish Congress, is much too slow. Peter Huber has advocated for common law rules in the telecommunications industry. Lawrence Lessig has discussed the benefits of common law related to the Internet. Judges and litigants recently have attempted to apply ommon law to disputes in the financial derivatives industry, where a statutory regime may be irrelevant at best. The arguments in favor of a common law system may be strongest in those areas involving rapid technological change, where the advantages of adaptability are more important, and where parties would benefit from a quick supply of relevant legal rules One final advantage to the common law's ability to supply legal rules is that by reporting decisions, courts generate a public record of what otherwise would be only unwritten law, customs, and oral legal traditions. Especially in the business context, certainty generated by enabling parties to rely on reported judicial decisions o a written record is essential; common law provides certainty by The reporting of decisions also ensures that changes in legal rules will be gradual and will need to be explained by reference to flaws in or departures from prior reported judicial reasoning. As publicly reported decisions increase in number and quality, the credibility of the common law system improves. A common law system with a sufficient number of well reasoned, publicly reported decisions can both provide parties with guidance in their daily lives and assure participants in the system that individual disputes will be resolved with appropriate attention and care. S awmaking as a free-standing function, but by attaching much greater emphasis to the establishment of legal rules than would be necessary if the courts sole function was the resolution of disputes. EISENBERG, supra note 2, at 4-5 "[The common law has emerged as a source of protection for intellectual property rights throughout this century whenever statutory protection for new forms of media were still evolving. "Bruce P. Keller, Condemned to Repeat the Past: The Reemergence of Misappropriation and Other Common Law Theories of Protection Intellectual Property Rights, 11 HARV. J. L. TECH. 401, 403(1998) e Huber, supra note 57 See Lessig, supra note 57; see also LAWRENCE LESSIG, CODE: AND OTHER LAWS OF CYBERSPACE 218-23(1999)(noting problems with legislators and need for LAwS See infra Part V Several scholars have noted that private parties interacting small groups may find ways of enforcing social practices without reported common aw or published statutes. See, e. g, ROBERT C ELLICKSON, ORDER WITHOUT LAW: How EIGHBORS SETTLE DISPUTES (1991)(describing such private enforcement regimes Catherine Mansell-Carstens, Popular Financial Culture in Mexico: The Case of the Tanda in CHANGING STRUCTURE OF MEXICO: POLITICAL, SOCIAL, AND ECONOMIC PROSPECTS 77(Laura Randall ed, 1996)(describing the" tanda"or"rosco, " an informal mechanism used by members of many small Mexican villages to allocate credit). However, in many instances -and particularly for parties transacting in a lobal business environment, where the possibility of informal resolution may be difficult-parties will need a formalized, specified system of dispute resolution Even in markets where parties risk suffering reputational costs from breaches of the enforcement through a more formal dispute resolution system-may naity of arties' expectations, those reputational costs alone without the possib uch breaches Leben, supra note 46, at 170 he common law is thought to be incomplete or vague it is not unlike many other valuable social institutions, practices, and systems of ideas that
2000] SYNTHETIC COMMON LAW 13 Keller has pointed to the emergence of common law in intellectual property disputes, where a statutory regime, especially given a sluggish Congress, is much too slow.59 Peter Huber has advocated for common law rules in the telecommunications industry.60 Lawrence Lessig has discussed the benefits of common law related to the Internet.61 Judges and litigants recently have attempted to apply common law to disputes in the financial derivatives industry, where a statutory regime may be irrelevant at best.62 The arguments in favor of a common law system may be strongest in those areas involving rapid technological change, where the advantages of adaptability are more important, and where parties would benefit from a quick supply of relevant legal rules. One final advantage to the common law’s ability to supply legal rules is that by reporting decisions, courts generate a public record of what otherwise would be only unwritten law, customs, and oral legal traditions. Especially in the business context, certainty generated by a written record is essential; common law provides certainty by enabling parties to rely on reported judicial decisions.63 The reporting of decisions also ensures that changes in legal rules will be gradual and will need to be explained by reference to flaws in or departures from prior reported judicial reasoning.64 As publicly reported decisions increase in number and quality, the credibility of the common law system improves. A common law system with a sufficient number of well reasoned, publicly reported decisions can both provide parties with guidance in their daily lives and assure participants in the system that individual disputes will be resolved with appropriate attention and care.65 lawmaking as a free-standing function, but by attaching much greater emphasis to the establishment of legal rules than would be necessary if the courts’ sole function was the resolution of disputes.” EISENBERG, supra note 2, at 4-5. 59 “[T]he common law has emerged as a source of protection for intellectual property rights throughout this century whenever statutory protection for new forms of media were still evolving.” Bruce P. Keller, Condemned to Repeat the Past: The Reemergence of Misappropriation and Other Common Law Theories of Protection for Intellectual Property Rights, 11 HARV. J. L. & TECH. 401, 403 (1998). 60 See Huber, supra note 57. 61 See Lessig, supra note 57; see also LAWRENCE LESSIG, CODE: AND OTHER LAWS OF CYBERSPACE 218-23 (1999) (noting problems with legislators and need for judicial action in regulating the Internet). 62 See infra Part V.B.2. 63 Several scholars have noted that private parties interacting repeatedly in small groups may find ways of enforcing social practices without reported common law or published statutes. See, e.g., ROBERT C. ELLICKSON, ORDER WITHOUT LAW: HOW NEIGHBORS SETTLE DISPUTES (1991) (describing such private enforcement regimes); Catherine Mansell-Carstens, Popular Financial Culture in Mexico: The Case of the Tanda in CHANGING STRUCTURE OF MEXICO: POLITICAL, SOCIAL, AND ECONOMIC PROSPECTS 77 (Laura Randall ed., 1996) (describing the “tanda” or “rosco,” an informal mechanism used by members of many small Mexican villages to allocate credit). However, in many instances – and particularly for parties transacting in a global business environment, where the possibility of informal resolution may be difficult – parties will need a formalized, specified system of dispute resolution. Even in markets where parties risk suffering reputational costs from breaches of the parties’ expectations, those reputational costs alone – without the possibility of enforcement through a more formal dispute resolution system – may not be sufficient to deter such breaches. 64 See Hinderks & Leben, supra note 46, at 170. 65 To the extent the common law is thought to be incomplete or vague it is not unlike many other valuable social institutions, practices, and systems of ideas that
14 10/9/00 DRAFT-DO NOT CITE WITHOUT PERMISSION [VOL # By publicly reporting decisions, courts also broadcast norms to ociety so that part d la ajority of disputes without burdening judicial resources. To the extent a society relies on the norms of self-regulating private communities transacting with each other in repeated interactions, public decisions can reinforce those norms. while making it clear that although most transactions will not lead to a dispute, clear rules will apply to those that de The Case Against the Common Law Many legal scholars dispute the view of the common law as attractive, efficient coral reef. As to the efficiency of common law, there are arguments pointing to severe cracks in the reefs foundation, which cannot support the weight of costly, complex dispute resolution. The core of these arguments is the economic notion that a common law system is a tragedy of the commons overuse is rampant, court resources are rationed, and outcomes are inefficient As to the common law' s ability to generate legal rules, there is a preliminary theoretical question as to whether there is any reef at all (i. e, whether common law can even be said to exist), and a more pragmatic question about the value of published common law decisions in modern society. For various reasons- fewer opinions written; more opinions depublished, selectively published decisions subject to confidentiality orders or under seal; and increased use of private adjudication- the common law is disappearing from public view, and often is no longer useful to parties planning their Devolution and inefficiency First is the argument that any common law system that could survive in a democracy necessarily is inefficient. The argument goes like this: judicial resources, including published decisions, are a public e, at their core, more art than science. See Brian Simpson, The Common Law and Legal Theory, in LEGAL THEORY AND COMMON LAW 17(William Twining ed, 1986) (In the sense used here a theory or general view of the common law represents an attempt to provide an answer to the question whether the common law can be said to exist at all-and this has been seriously doubted -and, if so, in what sense. ) se also infra Part Il. B See marc Galanter Real World Torts:: An Antidote to Anecdote. 55 MD L REV 1093, 1101-02(1996)(noting that such norms "influence not only the disputes that are brought to the courts, but also matters that never reach the courts); see also Howard Slavitt, Selling the Integrity of the System of Precedent: Selective Publication, Depublication, and vacatur, 30 HARV. C.R.-C.L. L REv. 109, 140 (1995)(noting that legal certainty enables parties to act in ways that avoid costly litigation) e,e.g, Robert D. Cooter, Decentralized Law for a Complex Economy, 23 Sw U.L. REV. 443, 445-46(1994)(labeling such norms as the "new law merchant"). For a detailed description of the law merchant, see I. Trotter Hardy, supra note 40, at e,e.g,Richard A. Epstein, Law and Economics: Its Glorious Past and Cloudy Future, 64 U CHI. L REv. 1167, 1169-70(1997)(criticizing early insistence on the efficiency of the common law, even as the legal system was moving lexorably in the opposite direction"): TULLOCK, supra note 23(similar criticism)
14 10/9/00 DRAFT – DO NOT CITE WITHOUT PERMISSION [VOL. #:# By publicly reporting decisions, courts also broadcast norms to society so that parties and lawyers can resolve the vast majority of disputes without burdening judicial resources.66 To the extent a society relies on the norms of self-regulating private communities transacting with each other in repeated interactions, public decisions can reinforce those norms, while making it clear that although most transactions will not lead to a dispute, clear rules will apply to those that do.67 B. The Case Against the Common Law Many legal scholars dispute the view of the common law as attractive, efficient coral reef.68 As to the efficiency of common law, there are arguments pointing to severe cracks in the reef’s foundation, which cannot support the weight of costly, complex dispute resolution. The core of these arguments is the economic notion that a common law system is a tragedy of the commons: overuse is rampant, court resources are rationed, and outcomes are inefficient. As to the common law’s ability to generate legal rules, there is a preliminary theoretical question as to whether there is any reef at all (i.e., whether common law can even be said to exist),69 and a more pragmatic question about the value of published common law decisions in modern society. For various reasons – fewer opinions written; more opinions depublished, selectively published, or vacated; more decisions subject to confidentiality orders or under seal; and increased use of private adjudication – the common law is disappearing from public view, and often is no longer useful to parties planning their lives and business affairs. 1. Devolution and Inefficiency First is the argument that any common law system that could survive in a democracy necessarily is inefficient. The argument goes like this: judicial resources, including published decisions, are a public are, at their core, more art than science. See Brian Simpson, The Common Law and Legal Theory, in LEGAL THEORY AND COMMON LAW 17 (William Twining ed., 1986) (“In the sense used here a theory or general view of the common law represents an attempt to provide an answer to the question whether the common law can be said to exist at all – and this has been seriously doubted – and, if so, in what sense.”); see also infra Part II.B.2. 66 See Marc Galanter, Real World Torts: An Antidote to Anecdote, 55 MD. L. REV. 1093, 1101-02 (1996) (noting that such norms “influence not only the disputes that are brought to the courts, but also matters that never reach the courts”); see also Howard Slavitt, Selling the Integrity of the System of Precedent: Selective Publication, Depublication, and Vacatur, 30 HARV. C.R.-C.L. L. REV. 109, 140 (1995) (noting that legal certainty enables parties to act in ways that avoid costly litigation). 67 See, e.g., Robert D. Cooter, Decentralized Law for a Complex Economy, 23 SW. U. L. REV. 443, 445-46 (1994) (labeling such norms as the “new law merchant”). For a detailed description of the law merchant, see I. Trotter Hardy, supra note 40, at 1019-21. 68 See, e.g., Richard A. Epstein, Law and Economics: Its Glorious Past and Cloudy Future, 64 U. CHI. L. REV. 1167, 1169-70 (1997) (criticizing early insistence “on the efficiency of the common law, even as the legal system was moving inexorably in the opposite direction”); TULLOCK, supra note 23 (similar criticism). 69 Simpson, supra note 65, at 9