Infusing Civil Rulemaking with Economic Theory

Paul Stancil, Substantive Equality and Procedural Justice, Iowa L. Rev. (forthcoming), available at SSRN.

For the most part, civil procedure teachers are dedicated doctrinalists. Nothing wrong in that, especially if well done.

Departing from this norm, Paul Stancil’s Substantive Equality and Procedural Justice is a highly ambitious piece that strives to anchor civil procedure and the rulemaking process in a theoretical construct, largely moored in sophisticated economic analysis.

As such, this piece is part of a subset of academic literature that suggests that the field of civil procedure lacks theoretical heft. Since the enactment of the Federal Rules of Civil Procedure more than seventy-five years ago, intellectually inclined academics periodically have called attention to a lack of “theory” undergirding civil procedure. Typically, this is accompanied by a call for rulemakers to infuse the rulemaking process with the author’s proposed theoretical construct. Stancil’s article is part of this genre; as he states, “Civil procedure has been too long without a theory” – a lacuna he intends to remedy.

In essence, Stancil’s article is a criticism of the foundational transsubstantive norm of the Federal Rules of Civil Procedure, that one set of rules should apply to all cases under all substantive law. Simply stated, he points out that the “homogeneous” nature of the civil case that pervaded rulemaking in 1938 has been rendered inequitable by the reality of “heterogeneous” cases on the modern civil docket. Consequently, the prevailing norm of transsubstantive rules and rigid formal equality fails to promote substantive equality. Each new generation of procedural scholars periodically arises to question the prevailing transsubstantive rulemaking norm. This is an old and recurring debate in the procedural arena.

In advancing his thesis, Stancil first anchors his paper in the scholarly work of other critical academics (Matsuda, Delgado, Crenshaw, and West) who have advanced similar theories arguing that formal equality is not the same as substantive equality. Stancil argues that this same critique should be applied to civil procedure. Surveying historical and theoretical accounts of formal and substantive equality derived from Aristotle, he arrives at a working definition of procedural justice to advance his construct. Stancil extensively relies on the recent scholarly contributions of David Marcus and Larry Solum, whose work centers on grand theories of procedural justice and the transsubstantive norm of the federal rules.

Stancil’s article rehearses an historical account of the origins of the transsubstantive rulemaking norm, the substance-procedure dichotomy in civil procedure, and the federal rulemaking process. He further canvasses the reasons why the transsubstantive norm currently works a substantive unfairness and inequality on litigants.

This discussion lays the groundwork for his proposal that federal civil rulemaking ought to be grounded in economic theories of civil litigation. The nub of his argument states:

For committee rulemakers genuinely committed to the creation of a procedurally just system, the most important moving parts are the merits of the parties’ claims and defenses and the intra-economic incentives that influence parties’ litigation behavior apart from the merits. In very general terms, a procedurally just system will maximize the effects of the parties’ merits positions upon the outcome of litigation, and it will minimize the effects of unrelated economic incentives upon the result.

Expanding on his economic theories, Stancil attempts to demonstrate that formal equality, absent sound economic analysis, leads to disastrous results, citing to recent Supreme Court pleading decisions and the newly amended proportionality rules.

Finally, Stancil concludes his article with a series of recommendations, largely directed at the federal rulemaking process and its constituent committees. He urges rulemakers to adopt an Aristotelian concept of the equality/justice relationship, and to pay careful attention to intra-case economic incentives. Perhaps Stancil’s most striking recommendation is a proposal to create a new federal agency to provide independent economic analysis to rulemaking committees as they undertake their rulemaking functions.

As indicated at the outset, Stancil’s article is a highly ambitious work that attempts, along with a small cohort of procedure scholars, to infuse this arena with “theory.” The article canvasses the work of academics engaged in this same conversation (critical scholars in other disciplines, proceduralists, and law-and-economics scholars), and does a yeoman’s job of setting forth historical context and descriptive material about the rulemaking process. Stancil obviously has leveraged his law-and-economics/antitrust background into his thinking about procedural law. And he offers both a theoretical construct for replacing the transsubstantive rulemaking norm and institutional suggestions for concretely implementing his proposals.

Stancil is writing for the small academic audience that places a high value on “theory” pieces, but he seeks to influence the rulemakers as well. This article is to be admired for its ambition and interdisciplinary approach. In a procedural world largely populated by very good doctrinalists – our dominant mode of scholarship – Stancil seeks to set himself apart as a higher-order thinker and is to be commended for his recommendations.

How this piece might be received by actual rulemakers, however, is another question altogether. For those who have attended rules-committee meetings deliberating on pending rule amendments, I can report that Aristotle does not come up. Indeed, the lack of a “theory of civil procedure” does not come up – which is precisely Stancil’s point. Nonetheless, he argues that these deliberations should be infused with theory to mitigate the deleterious consequences of the prevailing transsubstantive rulemaking norm. Better theory (law-and-economics version), in his view, would result in substantive equality.

Ever the realist, I can only suggest that this not going to happen. Given my understanding of how the federal rulemaking process works, proposals to infuse the rulemaking process with law-and-economics theory, or any other high-level theory (let alone create a new independent federal agency to do this) are unlikely to be adopted in practice.

But it is a case worth making, and Stancil makes it well.

Cite as: Linda Mullenix, Infusing Civil Rulemaking with Economic Theory, JOTWELL (January 23, 2017) (reviewing Paul Stancil, Substantive Equality and Procedural Justice, Iowa L. Rev. (forthcoming), available at SSRN),