Tag: law

Public Information and Public Choice

MalamudOne of the high points of last week’s Gov 2.0 Summit was transparency champion Carl Malamud’s speech on the history of public access to government information – ending with a clarion call for  government documents, data, and deliberation to be made more freely available online. The argument is a clear slam-dunk on simple grounds of fairness and democratic accountability. If we’re going to be bound by the decisions made by regulatory agencies and courts, surely at a bare minimum we’re all entitled to know what those decisions are and how they were arrived at. But as many of the participants at the conference stressed, it’s not enough for the data to be available – it’s important that it be free, and in a machine readable form. Here’s one example of why, involving the PACER system for court records:

The fees for bulk legal data are a significant barrier to free enterprise, but an insurmountable barrier for the public interest. Scholars, nonprofit groups, journalists, students, and just plain citizens wishing to analyze the functioning of our courts are shut out. Organizations such as the ACLU and EFF and scholars at law schools have long complained that research across all court filings in the federal judiciary is impossible, because an eight cent per page charge applied to tens of millions of pages makes it prohibitive to identify systematic discrimination, privacy violations, or other structural deficiencies in our courts.

If you’re thinking in terms of individual cases – even those involving hundreds or thousands of pages of documents – eight cents per page might not sound like a very serious barrier. If you’re trying to do a meta-analysis that looks for patterns and trends across the body of cases as a whole, not only is the formal fee going to be prohibitive in the aggregate, but even free access won’t be much help unless the documents are in a format that can be easily read and processed by computers, given the much higher cost of human CPU cycles. That goes double if you want to be able to look for relationships across multiple different types of documents and data sets.

All familiar enough to transparency boosters. Is there a reason proponents of limited government ought to be especially concerned with this, beyond a general fondness for openness? Here’s one reason.  Public choice theorists often point to the problem of diffuse costs and concentrated benefits as a source of bad policy. In brief, a program that inefficiently transfers a million dollars from millions of taxpayers to a few beneficiaries will create a million dollar incentive for the beneficiaries to lobby on its behalf, while no individual taxpayer has much motivation to expend effort on recovering his tiny share of the benefit of axing the program. And political actors have similarly strong incentives to create identifiable constituencies who benefit from such programs and kick back those benefits in the form of either donations or public support. What Malamud and others point out is that one thing those concentrated beneficiaries end up doing is expending resources remaining fairly well informed about what government is doing – what regulations and expenditures are being contemplated – in order to be able to act for or against them in a timely fashion.

Now, as the costs of organizing dispersed people get lower thanks to new technologies, we’re seeing increasing opportunities to form ad hoc coalitions supporting and opposing policy changes with more dispersed costs and benefits – which is good, and works to erode the asymmetry that generates a lot of bad policy. But incumbent constituencies have the advantage of already being organized and able to invest resources in identifying policy changes that implicate their interests. If ten complex regulations are under consideration, and one creates a large benefit to an incumbent constituent while imposing smaller costs on a much larger group of people, it’s a great advantage if the incumbent is aware of the range of options in advance, and can push for their favored option, while the dispersed losers only become cognizant of it when the papers report on the passage of a specific rule and slowly begin teasing out its implications.

Put somewhat more briefly: Technology that lowers organizing costs can radically upset a truly pernicious public choice dynamic, but only if the information necessary to catalyze the formation of a blocking coalition is out there in a form that allows it to be sifted and analyzed by crowdsourced methods first. Transparency matters less when organizing costs are high, because the fight is ultimately going to be decided by a punch up between large, concentrated interest groups for whom the cost of hiring experts to learn about and analyze the implications of potential policy changes is relatively trivial. As transaction costs fall, and there’s potential for spontaneous, self-identifying coalitions to form, those information costs loom much larger. The timely availability – and aggregability – of information about the process of policy formation and its likely consequences then suddenly becomes a key determinant of the power of incumbent constituencies to control policy and extract rents.

The Libertarian Case against the Google Book Search Deal

Five years ago, Google began scanning millions of books for inclusion in what eventually became Google Book Search. Google carefully designed the service to stay within the boundaries of copyright’s fair use provisions, at least as Google interpreted them. Still, some authors and publishers objected, and in 2005 they filed a lawsuit accusing Google of copyright infringement. The lawsuit dragged on for more than three years. Finally, in 2008, the parties announced a settlement of the lawsuit. Its text runs for 140 pages, not counting a secret termination clause available only to Google and its adversaries. The deadline for comments on the settlement was earlier this month, and on October 7 a federal judge must decide whether to approve or reject the settlement.

I was (and still am) firmly on Google’s side on the copyright claims at issue in the lawsuit. But the proposed settlement is another matter. The parties like to describe the agreement as a private agreement settling a legal dispute. But I agree with Librarian of Congress Marybeth Peters, who surprised almost everyone on Thursday when, testifying before Congress, she came out swinging against the agreement:

We realized that the settlement was not really a settlement at all, in as much as settlements resolve acts that have happened in the past and were at issue in the underlying infringement suits. Instead, the so-called settlement would create mechanisms by which Google could continue to scan with impunity, well into the future, and to our great surprise, create yet additional commercial products without the prior consent of rights holders. For example, the settlement allows Google to reproduce, display and distribute the books of copyright owners without prior consent, provided Google and the plaintiffs deem the works to be “out-of-print” through a definition negotiated by them for purposes of the settlement documents. Although Google is a commercial entity, acting for a primary purpose of commercial gain, the settlement absolves Google of the need to search for the rights holders or obtain their prior consent and provides a complete release from liability. In contrast to the scanning and snippets originally at issue, none of these new acts could be reasonably alleged to be fair use.

In the view of the Copyright Office, the settlement proposed by the parties would encroach on responsibility for copyright policy that traditionally has been the domain of Congress. The settlement is not merely a compromise of existing claims, or an agreement to compensate past copying and snippet display. Rather, it could affect the exclusive rights of millions of copyright owners, in the United States and abroad, with respect to their abilities to control new products and new markets, for years and years to come. We are greatly concerned by the parties’ end run around legislative process and prerogatives, and we submit that this Committee should be equally concerned.

The fundamental problem with the settlement is its audacious use of class action law. As my former colleague Mark Moller has argued, the aggressive use of class action law raises fundamental issues of fairness, due process, and the separation of powers. Rather than dozens of judges hearing individual cases and reaching judgments based on individual circumstances, class action law often asks a single judge to render justice on behalf of thousands of plaintiffs in a single decision. This arrangement opens the door to a whole host of potential problems. A single judge unlikely to have the knowledge required to render justice in thousands of individual cases simultaneously. And there’s a real danger that a nominally judicial proceeding will take on a fundamentally legislative character, reshaping the rights of thousands of people whose interests are not adequately represented by any of the parties before the judge.

This danger is especially acute in the Google Book Search case because of the incredibly broad scope of the class the plaintiffs purport to represent: all authors of books still under copyright in the United States. The settlement class doesn’t just include authors and publishers of still-in-print works, who are relatively easy to contact and can opt out of the settlement if they don’t like its terms. It also includes the copyright holders for millions of “orphan works” – works that are in copyright and whose authors cannot be located. These copyright holders are, by definition, difficult to find. The settlement effectively expropriates these absent parties for the benefit of Google and the large publishers leading the lawsuit.

The usurpation of the legislative function is especially clear in the case of orphan works because Congress has been actively considering legislation to deal with the orphan works problem. I have written in favor of an “orphan works” defense to copyright infringement. The leading orphan works proposals have two key features: they require prospective users of orphan works to make a good-faith effort to find rights-holders before using the works. And they are competitively neutral – everyone would have equal opportunity to use orphan works under the conditions set forth in the legislation.

The Book Search deal has neither characteristic. Using the legal fiction that the plaintiffs represent the interests of millions of absent copyright holders, the settlement would give Google carte blanch to use these orphan works without making a serious effort to contact their owners. This deprives some copyright holders of royalties to which they might otherwise be entitled. And it gives Google a permanent competitive advantage by giving Google an immunity to litigation that would not be available to competitors if they entered the same market. Not surprisingly, Google’s leading competitors, including Microsoft, Yahoo! and Amazon.com, have all urged the judge to reject the agreement.

Our system of government is based on the principle of the separation of powers. Congress, not the judicial branch, is responsible for making broad changes to rules of copyright. The Google Book Search settlement, if approved, would use the legal fiction of the class action lawsuit to re-write copyright law as it applies to the online book market. While the settlement includes some laudable provisions, it’s more important that the judge respect the separation of powers and reject the settlement.

Beach v. Florida

Cato Adjunct Scholar and Pacific Legal Foundation Senior Staff Attorney Tim Sandefur published an excellent op-ed in the National Law Journal this week on the upcoming Supreme Court case Stop the Beach Renourishment v. Florida Department of Environmental Protection:

The case involves a Florida statute determining the boundaries of oceanfront property. Under a 1961 law, the state drew a brand-new line separating public and private land on certain beaches, meaning that some land that would have been privately owned would belong instead to the state. A group of property owners filed suit, arguing that the law deprived them of property without just compensation, violating the state and federal constitutions.

Last December, Florida’s highest court rejected their arguments. It held that, while the new boundary gave the state ownership of the beach land, the former owners actually had no such right to begin with. Despite more than a century of Florida law to the contrary, the court announced that the owners actually only had a right to “access” the ocean, and because the state promised to allow them to keep crossing the land to reach the water, it actually hadn’t taken anything away when it seized the land itself.

Thus, by simply reinterpreting state property law, the court allowed the state to take property without compensation with a mere stroke of a pen. Yet the U.S. Constitution forbids states from confiscating property - even through legal legerdemain - without payment.

[.]

[T]he U.S. Constitution also guarantees every American’s right to due process of law and to protection of private property. If state judges can arbitrarily rewrite a state’s property laws, those guarantees would be meaningless. More than four decades ago, Justice Potter Stewart warned that, without a constitutional limit on the states’ power to determine the nature of property, states could “defeat the constitutional prohibition against taking property without due process of law by the simple device of asserting retroactively that the property it has taken never existed at all.”

It is well-worth a full read here.

Despite the dreadful decision in the Kelo case several years ago, the fight to maintain the fundamental right to private property continues in our courts and legislatures. Tim and PLF have been doing yeoman’s work in the fight for property rights, and I am proud to team Cato up with them and the NFIB Legal Center in filing an amicus brief on behalf of the rightful property owners in this case. You can download the PDF of the brief here.

Hillary: The Movie

The Supreme Court is soon to hear a case that may drastically roll back campaign finance regulation in the United States:

The case involves “Hillary: The Movie,” a mix of advocacy journalism and political commentary that is a relentlessly negative look at Mrs. Clinton’s character and career. The documentary was made by a conservative advocacy group called Citizens United, which lost a lawsuit against the Federal Election Commission seeking permission to distribute it on a video-on-demand service. The film is available on the Internet and on DVD. The issue was that the McCain-Feingold law bans corporate money being used for electioneering.

The right position for the Court is that McCain-Feingold, and all other campaign finance regulation, constitutes unconstitutional limitation on free speech. This means reversing the Court’s 1974 Buckley v. Valeo decision, which held that government limits on campaign spending were unconstitutional but limits on contributions were not.

This distinction is meaningless. If it is OK for a millionaire to spend his own money promoting his own campaign, why can he not give that money to someone else, who might be a more effective advocate for that millionaire’s views, so that this other person can run for office?

More broadly, campaign finance regulation is thought control: it takes a position on whether money should influence political outcomes. Whether or not one agrees, this is only one possible view, and freedom of speech is meant to prevent government from promoting or discouraging particular points of view.

It would be a brave step for Court to reverse Buckley, but it is the right thing to do.

For more background on the case, watch this:

C/P Libertarianism, from A to Z

Anti-Sex School for Johns?

In a novel approach to punishing men who attempt to hire prostitutes, Nashville and other cities are sending first-time offenders to a one-day class where they learn from former prostitutes, health experts, psychologists and law enforcement officers about “the risks of hiring a prostitute.”

This is a waste of time.

Prostitution is “the oldest profession” for a reason: sex is a biological imperative. A day of anti-sex school will have no effect on the demand for prostitution.

The better approach is to legalize.

Under legalization, the vast majority of men would patronize legal establishments. This would also allow quality control, since competition would encourage prostitution services to certify their employees as free from STDs and above the age of consent. Legalization would help the women who serve as prostitutes by reducing the violence they suffer from johns and pimps. In particular, legalization would mainly eliminate forced prostitution.

The claim that prostitution encourages sexual assault does not pass the sniff test. Many countries, plus Nevada and Rhode Island, allow legal prostitution to varying degrees, but no evidence suggests they have a higher incidence of violence toward women.

C/P Libertarianism, from A to Z

Argentina Decriminalizes Personal Drug Consumption

Following in Mexico’s footsteps last week, the Supreme Court of Argentina has unanimously ruled today on decriminalizing the possession of drugs for personal consumption.

For those who might be concerned with the idea of an “activist judiciary,” the Court’s decision was based on a case brought by a 19 year-old who was arrested in the street for possession of two grams of marijuana. He was convicted and sentenced to a month and a half in prison, but challenged the constitutionality of the drug law based on Article 19 of the Argentine Constitution:

The private actions of men which in no way offend public order or morality, nor injure a third party, are only reserved to God and are exempted from the authority of judges. No inhabitant of the Nation shall be obliged to perform what the law does not demand nor deprived of what it does not prohibit.

Today, the Supreme Court ruled that personal drug consumption is covered by that privacy clause stipulated in Article 19 of the Constitution since it doesn’t affect third parties. Questions still remain, though, on the extent of the ruling. However, the government of President Cristina Fernández has fully endorsed the Court’s decision and has vowed to promptly submit a bill to Congress that would define the details of the decriminalization policies.

According to some reports, Brazil and Ecuador are considering similar steps. They would be wise to follow suit.

Arizona to Feds: No “Enhanced” Drivers License

Last week, the governor of Arizona signed H.B. 2426, which bars the state from implementing the “enhanced” drivers license (EDL) program.

If the federal REAL ID revival bill (PASS ID) becomes law, it will give congressional approval to EDLs, which up to now have been simply a creation of the federal security and state driver licensing bureaucracies.

As governor of Arizona, the current Secretary of Homeland Security signed a memorandum of understanding with the DHS to implement EDLs, and she backs PASS ID even though she signed an anti-REAL ID bill as governor. As I said before, Secretary Napolitano seems to be taking the national ID tar baby in a loving embrace.