Thursday, February 26, 2015

Thinking Like a Lawyer: Wrong Triangles

By Robert H.

What are lawyers good for?  Well here is one thing: Economists are better than you at noticing economic trade offs.  Engineers are better than you at noticing design trade offs.  We lawyers may just be better than you at noticing the trade-offs inherent to rule making. 

This may be oversimplified, but I think the following is a good model for how lawyers think about rules.  Imagine you've got n triangle.  The vertices are labeled "simple" "clear" and "good outcomes in the case(s) at hand."  When contemplating a rule change, pretend the current rule puts you in the middle of the triangle.  The problem with making and updating legal rules is that any move towards one vertex is liable to move you away from another. 

For example, Alex Tabarrok just blogged about a decision in which the Supreme Court ruled that some unsupervised state regulatory boards aren't exempt from the anti-trust act.  In this case, the Court ruled that a state regulatory board made up of dentists can't try to create a monopoly in tooth whitening for their own industry.  Tabarrok, not a lawyer, thinks that Kennedy was balancing federalist concerns (ie, letting states have the authority to regulate without federal interference) with concerns about regulatory capture.

Nope!  Or at least, not entirely.  He was also balancing along the triangle, as Alito's dissent makes clear.  "Dentists can't use regulatory capture to make us all pay more for tooth whitening" is CLEARLY the right result (good outcomes), even if you love federalism.  The problem is that getting there creates either ambiguity (moves away from "clear") or complexity (moves away from "simple").  That's because the new rule -- regulatory bodies like this need state oversight to be exempt from anti-trust law -- begs the question of what counts as sufficient state oversight.  That question can either be left unanswered for district judges to work out on a case-by-case basis, which creates an ambiguity, or it can be worked out in exacting detail now or at a later date, which will create complexity.  Complexity and ambiguity are bad, but Kennedy thought it was worth it in this case to get good results.

Alito didn't.  He wanted a simple rule -- if a state says a regulatory body is backed by the state then that's good enough, and the regulator is exempt from anti-trust.  That would have moved us away from good outcomes (now dentists get to screw us) but towards "simple" and "clear" (we now know exactly what sort of regulatory bodies are exempt, and the rule for telling us that that is relatively simple). 

Obviously there is more to deciding a case than imagining this triangle, there was certainly more going on here than imagining a triangle, and some laws are so awful that you can improve them along all three of these dimensions.  But there is definitely a truth here lawyers are sensitive to and most people are not: the world is really complex, our moral judgments are really complex, and if you want real world legal outcomes to match your judgment of right and wrong you are going to get law that is either very complex (which has costs) or which puts a lot of the burden on individuals applying ambiguous directives to the facts at hand (which has costs).   The result is universally disappointing law: if the law gets an unfair result it is bad; if it is so impenetrable you need to hire an expert to explain it to you it is bad; and if the best your lawyer can say is "well, it could go either way, the judge gets a lot of wiggle room here," it is bad. 

Good laws are less bad; no laws are good.

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