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Monthly Archives: January 2013

Economic Analysis of Personal Jurisdiction

Daniel Klerman, Personal Jurisdiction and Product Liability, 85 S. Cal. L. Rev. ___ (forthcoming 2013).

Here is a practical problem: Where should a person who was harmed by a product be able to sue the manufacturer of that product?

Here is a complex judicial answer to that problem: Combine ½ cup state sovereignty and ½ cup due process, cook on low simmer and stir with circular reasoning, adding three or four new factors every twenty years. After ingesting this concoction you might feel a bit ill, as did one civil procedure student who wrote on an exam: “personal jurisdiction is a pain in the _____” (original language omitted). Felix Cohen said it more eloquently when he described the kind of reasoning that still passes for personal jurisdiction doctrine as “transcendental nonsense,” but the student’s reaction is more direct.

Daniel Klerman’s new article, Personal Jurisdiction and Product Liability, is a welcome antidote to the combination of creeping transcendentalism in the Case of the Giant Shears (the Supreme Court’s most recent personal jurisdiction case, more commonly known as J. McIntyre v. Nicastro), and the proliferation of factors that characterizes personal jurisdiction doctrine today. Personal jurisdiction is an area of law for which economic analysis especially well-suited because of the policy implications entailed. As hard as it is to imagine, Klerman’s is the first article to apply economic analysis to personal jurisdiction doctrine. I am glad he was the one to do it.

At the start of the piece, Klerman points out that previous work on where a manufacturer should be sued approached the problem ex post. The contribution of much of the law-and-economics literature, however, is to take an ex ante approach to analyzing problems of this type. This is Klerman’s main contribution, and it is masterfully done. He first analyzes the question based on an assumption of low transactions costs, and then loosens this assumption to address the high transactions costs that more accurately reflect lived reality.

The bottom line is that it is extremely unlikely that consumers will take the time to figure out the likely forum and applicable law at the time they purchase a product. As a result, if personal jurisdiction is based on where manufacturers choose to locate their activities, manufacturers will have incentives to make locational decisions that select procedural and substantive law that favors them, as well as forums that are convenient for defendants but inconvenient for plaintiffs. Laws allowing consumers to sue only in the distributor’s state will lead manufacturers to hire distributors in states with the most pro-manufacturer “product liability laws and procedures, and, as a result, [manufacturers] would have insufficient incentives to design and manufacture safe products.” Rules favoring jurisdiction in the manufacturer’s home state or in the state of design or manufacture of the product are likely to produce similar results, as manufacturers either move or influence the laws where they already are.

Klerman argues that the most efficient rule allows suit where the product is sold to the consumer. He recognizes this rule might lead to a slight pro-plaintiff bias, but argues that this bias can be mitigated by defendant’s price adjustments and is the most likely to lead to optimal product liability laws.

In reaching this conclusion, Klerman examines a number of underlying questions, including whether manufacturers would be responsive to these rules and adjust their prices accordingly, how manufacturers could deal with the problem of cross-jurisdictional arbitrage, and the effect of manufacturers producing products for national or international markets, not individual states. To each of these concerns he provides a sustained analysis and a persuasive answer. For example, he argues that a rule requiring foreign manufacturers to submit to jurisdiction in any state in which their products are sold will prevent them from insulating themselves against liability by choosing distributors in states with sub-optimal product liability laws and discourage domestic manufacturers from relocating in order to avoid liability. He notes that cross-jurisdictional arbitrage is unlikely to be a problem because most people outside the northeast are unlikely to travel to a different state in order to purchase a product and because price differentials are likely to be small. If this is a problem, he suggests a rule permitting jurisdiction in the place where the plaintiff resided at the time of purchase. Finally, he argues that states are unlikely to take advantage of product standardization to eliminate product liability altogether (ultimately leading to national under-regulation) because manufacturers will not reduce prices so much to make this tactic worthwhile for citizens.

Even if you do not ultimately agree with Klerman’s underlying supposition that product liability laws are useful and necessary to regulate product safety (he builds on the work of others), his economic analysis of personal jurisdiction is important because it lays the foundation for healing the doctrine. As he writes at the end of the piece, his mode of analysis is novel because “[i]nstead of focusing on defendants’ contacts or intentions, it focuses on real world consequences.” That focus may be just the cure for a personal jurisdiction doctrine suffering from a mixture of legal fictions, formalism, and factoritis.

Cite as: Alexandra D. Lahav, Economic Analysis of Personal Jurisdiction, JOTWELL (January 21, 2013) (reviewing Daniel Klerman, Personal Jurisdiction and Product Liability, 85 S. Cal. L. Rev. ___ (forthcoming 2013)),

Considering the Civil Jury

Jason M. Solomon, The Political Puzzle of the Civil Jury, 61 Emory L.J. 1331 (2012).

The civil jury is in this year.  In The Political Puzzle of the Civil Jury, Jason Solomon examines the role of the civil jury as a political institution—in other words, the role of the jury in democracy.  Seeking to begin a discussion in the literature on whether the civil jury serves as a political institution, Solomon exhaustively and critically examines the justifications for the civil jury in this role.  Solomon’s is one of several excellent recent articles on the civil jury; others include John Langbein’s The Disappearance of the Civil Jury, and Darrell Miller’s Historical Tests, (Mostly) Unbalanced Rights, and What the Seventh Amendment Can Teach Us About the Second.

Solomon begins with a provocative argument that some of the most important cases in the last four terms of the Supreme Court, including Snyder v. Phelps, Wyeth v. Levine, Exxon Shipping Co. v. Baker, and Wal-Mart Stores, Inc. v. Dukes, reflect a distrust of the civil jury and a concern that juries are deciding law-like questions.  As a result, Solomon argues, we must continue to evaluate the jury.  In doing this in the past, the focus has been on whether the jury has the ability to decide cases effectively.  The ready response here has been that the ability of juries to decide cases matches that of judges.  In addition to an adjudicative role, however, some scholars argue that the jury serves as a political institution.  Solomon argues that this justification should be fully assessed, and the competencies of juries to judges should be compared.

Solomon commences his analysis of the jury as a political institution by looking at whether the jury serves as a check on governmental power.  After arguing that the jury does not perform this role, Solomon examines whether the jury is a check on corporate power, which he also rejects with much evidence.  Next, Solomon wonders whether the jury is important to counteract repeat players.  He ultimately concludes, though, that repeat players actually have more influence over juries than one-time litigants.

After his discussion of the jury as a check, Solomon next discusses whether the jury provides democratic legitimacy.  He first examines the normative legitimacy of the jury.  He rejects the claim that the jury looks like the community from which it is drawn and also counters the idea that twelve heads are better than one.  Additionally, Solomon analyzes whether the jury’s deliberative process confers legitimacy, criticizing this in part because the jury gives no reasons for its decisions.  Solomon also questions whether the jury can actually arrive at the right answer as is often propounded.  After completing this examination of the normative legitimacy of the civil jury, Solomon assesses the sociological legitimacy—that people perceive the civil justice system as more legitimate when there is a jury.  Following this analysis, he goes on to criticize the ability of the jury to inject community norms into the system and to make people better citizens.

Much of Solomon’s criticism of the jury stems from the harm to rule-of-law values, including that, as just stated, the jury—which exists in a black box—does not give reasons for its decisions, that like cases should be treated the same and the jury cannot do so and finally, that a jury decision has no precedential value.  Solomon also emphasizes that judges are at least as good at the jobs that the jury is supposed to be doing.

In the article, Solomon makes five concrete though preliminary suggestions to improve the role of the jury as a political institution.  First, the jury should not vote at the beginning of its deliberations so that deliberations can be more evidence-driven.  Second, a verdict based on an eighty-percent supermajority rule would be better than the current unanimous and majority vote systems that respectively lead to dissenting jurors not speaking out and jurors ignoring dissenting views.  Third, a jury with more occupational and educational diversity will promote the legitimacy of the system as well as the deliberative process of the jury.  Fourth, Solomon wants us to question the county (the level at which juries are selected in many states) as the proxy for community.  And fifth, he suggests encouraging jurors to keep in touch with one another after their service on the jury is complete, in order to increase political and civil engagement.  After this comprehensive analysis of this important, unaddressed issue of whether the jury is a political institution, Solomon concludes with his original argument that the benefits of the jury as a political institution are overstated.

Solomon’s article was a joy to read and should be widely cited on the topic of the role of the civil jury.  In a clear and concise manner and with impressive detail, Solomon makes us think differently about the jury, questioning its role as a political institution.  Moreover, by discussing the legitimacy of justice systems of other countries without civil jury systems, Solomon leans in the direction of recent scholarly work questioning why we have civil juries at all.

It may beyond the scope of Solomon’s article, but from my scholarly perspective, I wonder why it matters whether the jury plays the political role or any role well including for purposes of legitimacy.  The existence of other what I have referred to as constitutional actors – such as the executive, the legislature, and the judiciary – have not been questioned like the civil jury’s existence has been questioned.  Does the jury not have a distinct role under the Constitution just as these other actors have?

We can all look forward to more great work by Solomon challenging assumptions about the civil jury, including an upcoming companion article, which will argue that juries and open-ended standards are worse than judges and presumptive rules in identifying and applying social norms.

Cite as: Suja A. Thomas, Considering the Civil Jury, JOTWELL (January 7, 2013) (reviewing Jason M. Solomon, The Political Puzzle of the Civil Jury, 61 Emory L.J. 1331 (2012)),