Mark F. Grady

BMW v. Gore: Mitigating the Punitive Economics of Punitive Damages

In BMW v Gore, the Supreme Court held that a state courts award of punitive damages was so excessive that it violated the Due Process Clause. In three other recent cases, the Court had rejected due process challenges to large awards of punitive damages. Although the Court did not articulate an economic rationale, these four cases are consistent with a theory under which federal courts should intervene only when there is a high risk that punitive damages will systematically appropriate wealth from the citizens of other states. Rather than apply due process analysis directly to punitive damages awards, the Court might more usefully revise the constitutional rules regulating the exercise of long-arm jurisdiction. With clear and realistic rules allowing firms to avoid states in which juries are not adequately restrained, the mechanisms of federalism would adequately control excessive punitive damages. Gore may be an effort to approximate this result by other means.

The Law and Economics of Cybersecurity

Part I. Problems: 1. Private versus social incentives in cybersecurity, law and economics Bruce K. Kobayashi 2. A model for when disclosure helps security: what is different about computer and network security? Peter Swire 3. Peer production of survivable critical infrastructures Yochai Benkler 4. Cyber security: of heterogeneity and autarchy Randal C. Picker 5. Network responses to network threats: the evolution into private cybersecurity associations Amitai Aviram 6. The dark side of private ordering for cybersecurity Neal K. Katyal 7. Holding Internet Service Providers accountable Doug Lichtman and Eric P. Posner 8. Global cyberterrorism, jurisdiction, and international organization Joel T. Trachtman.

A Positive Theory of the Attorney-Client Privilege and the Work Product Doctrine

This article proposes a positive theory that explains the confidentiality rules. Our argument is that the attorney-client privilege and the work product doctrine offer two perspectives of a larger goal of increasing the amount of information about disputes that is available to courts and to work against the disincentives to the production of that information which would otherwise exist.

Causation and Foreseeability

This paper critiques the theory of causation offered by Steven Shavell and proposes a new theory that more successfully predicts the results of proximate cause cases. Two doctrines of proximate cause exist: “direct consequences” and “reasonable foresight.” We can explain case law best if we assume that both doctrines must be satisfied in order for negligence liability to exist. Thus, the two doctrines do not represent alternative conceptions of proximate cause as some analysts have proposed. Proximate cause limitations are prominent when a party has inadvertently, as opposed to deliberately, omitted a reasonable precaution. Actors cannot efficiently reduce their inadvertent lapses to zero. In situations in which the defendant’s conduct has been “possibly efficient,” causation doctrines truncate liability. This truncation has the effect of preserving efficient activity levels and preventing actors from substituting inefficiently durable precaution for nondurable precaution.

Tort Reform: An Economic Approach

Tort reform is an unusual political occurrence. The negligence system has been in place for centuries, but legislatures have altered it only a handful of times. In this century, the three major reforms have been the workers compensation reform of the early part of the century, the no fault auto reforms of the 1960s, and the medical malpractice reforms of this and the last decade, which are the focus of this paper.

The Paradox of the Negligence Rule

The negligence rule contains a paradox in that the more advanced safety technology becomes, the more negligence liability there is. In order to see what drives this paradox, we need to examine two key negligence ideas: “unavoidable accident” and a related concept that I will call “inevitable accident.” “Unavoidable accident” is the expected harm (per unit of time) that remains when an actor has installed all reasonable safety appliances, has made all reasonable precaution plans, and has perfectly followed through on these reasonable precaution plans. The other concept, “inevitable accident,”1 is the expected value of accidents (over the same unit of time) that an actor would create if he or she made a reasonable number of errors in following through on reasonable precaution plans. It is of course possible that an actor’s inevitable accident will be zero, but for various reasons it is instead likely to be positive. These “compliance errors” are the main source of negligence in the real world.