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Full-Text Articles in Law
Should Automakers Be Responsible For Accidents?, Kyle D. Logue
Should Automakers Be Responsible For Accidents?, Kyle D. Logue
Articles
Motor vehicles are among the most dangerous products sold anywhere. Automobiles pose a larger risk of accidental death than any other product, except perhaps opioids. Annual autocrash deaths in the United States have not been below 30,000 since the 1940s, reaching a recent peak of roughly 40,000 in 2016. And the social cost of auto crashes goes beyond deaths. Auto-accident victims who survive often incur extraordinary medical expenses. Those crash victims whose injuries render them unable to work experience lost income. Auto accidents also cause nontrivial amounts of property damage—mostly to the automobiles themselves, but also to highways, bridges, or …
It Is Time For Washington State To Take A Stand Against Holmes's Bad Man: The Value Of Punitive Damages In Deterring Big Business And International Tortfeasors, Jackson Pahlke
University of Michigan Journal of Law Reform
In Washington State, tortfeasors get a break when they commit intentional torts. Instead of receiving more punishment for their planned bad act, intentional tortfeasors are punished as if they committed a mere accident. The trend does not stop in Washington State—nationwide, punitive damage legislation inadequately deters intentional wrongdoers through caps and outright bans on punitive damages. Despite Washington State’s one hundred and twenty-five year ban on punitive damages, it is in a unique and powerful position to change the way courts across the country deal with intentional tortfeasors. Since Washington has never had a comprehensive punitive damages framework, and has …
Expressive Law And The Americans With Disabilities Act, Alex C. Geisinger, Michael Ashley Stein
Expressive Law And The Americans With Disabilities Act, Alex C. Geisinger, Michael Ashley Stein
Michigan Law Review
The question of why people follow the law has long been a subject of scholarly consideration. Prevailing accounts of how law changes behavior coalesce around two major themes: legitimacy and deterrence. Advocates of legitimacy argue that law is obeyed when it is created through a legitimate process and its substance comports with community mores. Others emphasize deterrence, particularly those who subscribe to law-and-economics theories. These scholars argue that law makes certain socially undesirable behaviors more costly, and thus individuals are less likely to undertake them.
Portmanteau Ascendant: Post-Release Regulations And Sex Offender Recidivism, J. J. Prescott
Portmanteau Ascendant: Post-Release Regulations And Sex Offender Recidivism, J. J. Prescott
Articles
The purported purpose of sex offender post-release regulations (e.g., community notification and residency restrictions) is the reduction of sex offender recidivism. On their face, these laws seem well-designed and likely to be effective. A simple economic framework of offender behavior can be used to formalize these basic intuitions: in essence, post-release regulations either increase the probability of detection or increase the immediate cost of engaging in the prohibited activity (or both), and so should reduce the likelihood of criminal behavior. These laws aim to incapacitate people outside of prison. Yet, empirical researchers to date have found essentially no reliable evidence …
A Financial Economic Theory Of Punitive Damages, Robert J. Rhee
A Financial Economic Theory Of Punitive Damages, Robert J. Rhee
Michigan Law Review
This Article provides a financial economic theory of punitive damages. The core problem, as the Supreme Court acknowledged in Exxon Shipping Co. v. Baker, is not the systemic amount of punitive damages in the tort system; rather it is the risk of outlier outcomes. Low frequency, high severity awards are unpredictable, cause financial distress, and beget social cost. By focusing only on offsetting escaped liability, the standard law and economics theory fails to account for the core problem of variance. This Article provides a risk arbitrage analysis of the relationship between variance, litigation valuation, and optimal deterrence. Starting with settlement …
Coordinating Sanctions In Torts, Kyle D. Logue
Coordinating Sanctions In Torts, Kyle D. Logue
Articles
This Article begins with the standard Law and Economics account of tort law as a regulatory tool or system of deterrence, that is, as a means of giving regulated parties the optimal ex ante incentives to minimize the costs of accidents. Building on this fairly standard (albeit not universally accepted) picture of tort law, the Article asks the question how tort law should adjust, if at all, to coordinate with already existing non-tort systems of regulation. Thus, if a particular activity is already subject to extensive agency-based regulation (whether in the form of command-and-control requirements or in the form of …
Letting Good Deeds Go Unpunished: Volunteer Immunity Laws And Tort Deterrence, Jill R. Horwitz, Joseph Mead
Letting Good Deeds Go Unpunished: Volunteer Immunity Laws And Tort Deterrence, Jill R. Horwitz, Joseph Mead
Articles
Does tort law deter risky behavior in individuals? We explore this question by examining the relationship between tort immunity and volunteering. During the 1980s and 1990s, nearly every state provided some degree of volunteer immunity. Congress followed with the 1997 Volunteer Protection Act. This article analyzes these acts, identifying three motivations for them: the chilling effects of tort liability, limits on liability insurance, and moral concerns. Using data from the Independent Survey’s Giving and Volunteering surveys, we then identify a large and positive correlation between immunity and volunteering. We next consider the implications of the findings for tort theory and …
Operationalizing Deterrence Claims Management (In Hopsitals, A Large Retailer, And Jails And Prisons), Margo Schlanger
Operationalizing Deterrence Claims Management (In Hopsitals, A Large Retailer, And Jails And Prisons), Margo Schlanger
Articles
The theory that the prospect of liability for damages deters risky behavior has been developed in countless articles and books. The literature is far sparser, however, on how deterrence is operationalized. And prior work slights an equally important effect of damage actions, to incentivize claims management in addition to harm-reduction responses that are cost- rather than liabilityminimizing. This article works in the intersection of these two understudied areas, focusing on claims management steps taken by frequently sued organizations, and opening a window into the black box of deterrence to see how those steps may end up serving harm-reduction purposes as …
Optimal Tax Compliance And Penalties When The Law Is Uncertain, Kyle D. Logue
Optimal Tax Compliance And Penalties When The Law Is Uncertain, Kyle D. Logue
Articles
This article examines the optimal level of tax compliance and the optimal penalty for noncompliance in circumstances in which the substance of the tax law is uncertain - that is, when the precise application of the Internal Revenue Code to a particular situation is not clear. In such situations, a number of interesting questions arise. This article will consider two of them. First, as a normative matter, how certain should taxpayers be before they rely on a particular interpretation of a substantively uncertain tax rule? If a particular position is not clearly prohibited but neither is it clearly allowed, what …
Rewarding Outside Directors, Assaf Hamdani, Reinier Kraakman
Rewarding Outside Directors, Assaf Hamdani, Reinier Kraakman
Michigan Law Review
While they often rely on the threat of penalties to produce deterrence, legal systems rarely use the promise of rewards. In this Article, we consider the use of rewards to motivate director vigilance. Measures to enhance director liability are commonly perceived to be too costly. We, however demonstrate that properly designed reward regimes could match the behavioral incentives offered by negligence-based liability regimes but with significantly lower costs. We further argue that the market itself cannot implement such a regime in the form of equity compensation for directors. We conclude by providing preliminary sketches of two alternative reward regimes. While …
The Corporate Monitor: The New Corporate Czar?, Vikramaditya Khanna, Timothy L. Dickinson
The Corporate Monitor: The New Corporate Czar?, Vikramaditya Khanna, Timothy L. Dickinson
Michigan Law Review
Following the recent spate of corporate scandals, government enforcement authorities have increasingly relied upon corporate monitors to help ensure law compliance and reduce the number of future violations. These monitors also permit enforcement authorities, such as the Securities & Exchange Commission and others, to leverage their enforcement resources in overseeing corporate behavior. However there are few descriptive or normative analyses of the role and scope of corporate monitors. This paper provides such an analysis. After sketching out the historical development of corporate monitors, the paper examines the most common features of the current set of monitor appointments supplemented by interviews …
Getting The Word Out About Fraud: A Theoretical Analysis Of Whistleblowing And Insider Trading, Jonathan Macey
Getting The Word Out About Fraud: A Theoretical Analysis Of Whistleblowing And Insider Trading, Jonathan Macey
Michigan Law Review
The purpose of this Article is to show that corporate whistleblowing is not analytically or functionally distinguishable from insider trading when such trading is based on "whistleblower information," that is, the information a whistleblower might disclose to the authorities. In certain contexts, both insider trading and whistleblowing, if incentivized, would reduce the incidence of corporate pathologies such as fraud and corruption. In light of this analysis, it is peculiar that whistleblowing is encouraged and protected, while insider trading on whistleblower information is not only discouraged but criminalized. Often, insider trading will be far more effective than whistleblowing at bringing fraud …
Second Best Damage Action Deterrence, Margo Schlanger
Second Best Damage Action Deterrence, Margo Schlanger
Articles
Potential defendants faced with the prospect of tort or tort-like damage actions can reduce their liability exposure in a number of ways. Prior scholarship has dwelled primarily on the possibility that they may respond to the threat of liability by augmenting the amount of care they take.1 Defendants (I limit myself to defendants for simplicity) will increase their expenditures on care, so the theory goes, when those expenditures yield sufficient liability-reducing dividends; more care decreases liability exposure by simultaneously making it less likely that the actors will be found to have behaved tortiously in the event of an accident and …
The Genie And The Bottle: Collateral Sources Under The September 11th Victim Compensation Fund, Kenneth S. Abraham, Kyle D. Logue
The Genie And The Bottle: Collateral Sources Under The September 11th Victim Compensation Fund, Kenneth S. Abraham, Kyle D. Logue
Articles
The September 11th Victim Compensation Fund of 2001 (the Fund) was part of legislation enacted just eleven days after the terrorist attacks of September 11th in the wake of extraordinary national loss. It is possible, therefore, that the Fund will always be considered an urgent and unique response to the unprecedented events of September 11th. On that view, the character of the Fund will have little longterm policy significance. It is equally possible, however, that the enactment of the Fund will prove to be a seminal moment in the history of tort and compensation law. The Fund adopts a new …
Legal Transitions, Rational Expectations, And Legal Progress, Kyle D. Logue
Legal Transitions, Rational Expectations, And Legal Progress, Kyle D. Logue
Articles
In the literature on legal transitions, the term "transition policy" is generally understood to mean a rule or norm that influences policymakers' decisions concerning the extent to which legal change should be accompanied by transition relief, whether in the form of grandfathering or phase-ins or direct compensation. Legal change within this literature is defined broadly, and somewhat counter-intuitively, to include any resolution of the uncertainty regarding what the law will be in the future or how the law will be applied to future circumstances. Thus, a legal change would obviously include an unexpected repeal of a tax provision, such as …
Solving The Judgment-Proof Problem, Kyle D. Logue
Solving The Judgment-Proof Problem, Kyle D. Logue
Articles
A tortfeasor who cannot fully pay for the harms that it causes is said to be "judgment proof." Commentators have long recognized that the existence of judgment-proof tortfeasors seriously undermines the deterrence and insurance goals of tort law. The deterrence goal is undermined because, irrespective of the liability rule, judgment-proof tortfeasors will not fully internalize the costs of the accidents they cause. The insurance goal will be undermined to the extent that the judgment-proof tortfeasor will not be able to compensate fully its victims and that first-party insurance markets do not provide an adequate response. Liability insurance can ameliorate these …
The First-Party Insurance Externality: An Economic Justification For Enterprise Liability, Jon D. Hanson, Kyle D. Logue
The First-Party Insurance Externality: An Economic Justification For Enterprise Liability, Jon D. Hanson, Kyle D. Logue
Articles
This Article explores the insurance and deterrence implications of important and long overlooked facts. Consumers are insured through first-party mechanisms against most of the risks of product accidents. However, first-party insurers rarely and imperfectly adjust premiums according to an individual consumer's decisions concerning exactly what products she will purchase, how many of those products she will purchase, and how carefully she will consume them. Such consumer decisions we refer to as "consumption choices. " This failure by first-party insurers to adjust premiums according to consumption choices gives rise to a first-party insurance externality. Based on this insight, this Article offers …
Road Signs And The Goals Of Justice, Joseph Sanders
Road Signs And The Goals Of Justice, Joseph Sanders
Michigan Law Review
Review of Ideals, Beliefs, Attitudes, and the Law: Private Law Perspectives on a Public Law Problem by Guido Calabresi
The Allocation Of Prosecution: An Economic Analysis, Michigan Law Review
The Allocation Of Prosecution: An Economic Analysis, Michigan Law Review
Michigan Law Review
This Note uses economic theory to reassess the division of prosecutorial tasks between victims and the government for offenses other than victimless offenses. It attempts to answer in a general manner questions such as why the prosecutor should differ from offense to offense and where ,the line should be drawn between governmental and individual prosecution. Work done in the areas of welfare economics and public finance concerning the effectiveness of government and the private sector in providing different sorts of goods is drawn upon heavily. This Note views prosecution as an economic good and a victim's prosecution of an offender …