Forum-Shopping and Institutional Economics
The New York Times ran a story yesterday about how Marshall, TX, is becoming a haven for patent litigation. Plaintiffs like Marshall for 2 reasons: (1) the court in Marshall hears patent cases faster than other districts do, and (2) the court in Marshall finds for the plaintiff in a higher rate of cases than other courts do.
I think this is a good illustration of why institutional economists are onto something important. Competition puts pressure on people, and people try to find the easiest way to alleviate that pressure. For competition to be a socially useful motivator, it is important that institutions establish incentives for people to channel their competitive urges in socially beneficial ways. Thus, for example, we want firms to compete by holding the quality of their product constant while pushing prices lower. We don't want firms to compete by erecting high barriers to entry into the market.
Competition is like squeezing a tube of toothpaste from the center. If all of the institutional constraints are set up advantageously, then when you squeeze, the toothpaste will come out of the end of the tube and land on your toothbrush. Bad institutions are like holes in the tube. When you apply the pressure of competition, you get undesirable results.
Is this forum-shopping in Marshall a good thing? I think it's probably a bad thing for courts to compete for business by ruling for plaintiffs in a higher rate of cases. But it may be good for courts to compete over how fast they hear cases on their dockets. Even this kind of competition can be problematic, however, if courts achieve faster disposition of cases by cutting important procedural corners. It's complicated.
Thoughts?
I think this is a good illustration of why institutional economists are onto something important. Competition puts pressure on people, and people try to find the easiest way to alleviate that pressure. For competition to be a socially useful motivator, it is important that institutions establish incentives for people to channel their competitive urges in socially beneficial ways. Thus, for example, we want firms to compete by holding the quality of their product constant while pushing prices lower. We don't want firms to compete by erecting high barriers to entry into the market.
Competition is like squeezing a tube of toothpaste from the center. If all of the institutional constraints are set up advantageously, then when you squeeze, the toothpaste will come out of the end of the tube and land on your toothbrush. Bad institutions are like holes in the tube. When you apply the pressure of competition, you get undesirable results.
Is this forum-shopping in Marshall a good thing? I think it's probably a bad thing for courts to compete for business by ruling for plaintiffs in a higher rate of cases. But it may be good for courts to compete over how fast they hear cases on their dockets. Even this kind of competition can be problematic, however, if courts achieve faster disposition of cases by cutting important procedural corners. It's complicated.
Thoughts?
posted by Garrett at 10:46 AM
2 Comments:
Competition is a concept best left to our political branches. Whether it be docket clearing, plaintiff sympathy, or baroque furnishings, I can think of no aspect of courtrooms that would be well served by competition among fora. (Save possibly in the election campaigns of judges in certain states, but the problems with electing a judiciary are another matter.)
Why? Because there is no incentive to competing that makes sense as a good in itself. When firms compete, they are competing for money, which they see as a good in itself (bear with my sloppy analysis) and their competition has secondary effects that are good for all of us. Suppose courts compete. What are they competing for? "Good" litigants? Fast litigants? Put another way, I'm just asking what the analog for money is in the competition analysis.
Given our current system, I think they would be competing for quickly adjudicated cases argued by adept attorneys. (And speeding through their dockets to attract such litigants) That rules out most impact litigation. Further, given our system of presumption, long cases are probably plaintiffs' cases, since they have to do more work to get a judgment. So, slow cases would go to the "bad" courts that cannot compete well enough to get fast cases. Any benefit we would get from faster adjudication would be swallowed in the unfairness to plaintiffs that would result by allowing courts to compete for certain kinds of suits.
There is nothing consistent with justice in the notion that courts should be clamoring for certain kinds of cases--least of all fast cases because that would simply throw one more advantage on the pile of advantages held by the defense bar.
What do you think?
What about affirmance rate?
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