14

Final Reflections

The purpose of this volume has been to pursue the interaction of three elements: private property, public administration, and the rule of law. Any viable legal system needs to have all three, and must therefore work out ways to distribute responsibilities between public and private actors. When it comes to making such choices, it is worth remembering that in most instances, private parties do not have anything approaching a monopoly position, and thus are at least somewhat constrained in how they behave by the presence of strong competitive forces. Governments have a monopoly of force within their jurisdictions, and thus are likely to face less discipline from market forces, even in a federalist system that affords citizens some protection by way of exit rights that allow them to vote with their feet. In dealing with these two sources of power, the trick is to try to leave the highest levels of discretion in the hands of those parties who are hemmed in by the stronÂgest competitive forces. In general, therefore, the nod goes to private ordering.

That preference, however, can hardly be absolute in light of two risks. The first is the private use of force and fraud. The second is the abuse of monopoly power. It is to combat those behaviors that governments are instituted, so that they can use their own force to combat the dangers of any private system of control. Yet once they are endowed with that power, the question still remains: Who guards the guardians? That challenge cannot be answered by pointing to a group of Platonic guardians who stand outside the social order. Rather, such protection must come from a set of institutional arrangements that rely on the rule of law to constrain the behavior of public actors in two ways. First, the rule of law limits the areas in which public ofÂfiÂcials have discretion. Second, the rule of law helps incline public ofÂfiÂcials to use sound discretion in the exercise of their powers.

The rule of law as a bulwark against arbitrary power receives approbation. I can think of no working poÂlitÂiÂcal figÂure or academic who disparages the importance of the rule of law, which, when all is said and done, is one welcome constraint against the exercise of arbitrary power. That principle had its inception in the earliest times, when the top- down power of monarchs was at its peak and where the rule of law served as a counterweight to the tyranny of a single individual. But itÂquickly spread to democratic soÂciÂeÂties, where the new risk was the tyranny of the majority. In and of itself, the rule-ofÂ-law principle does put imÂporÂtant brakes on poÂlitÂiÂcal power, but its effectiveness depends in large meaÂsure on the substantive legal regime with which it has to in teract.

On this score, rules of property and contract fare well because the formulation of those substantive rights reinforces the traditional concerns of the rule of law on matters of clarity, consistency, simplicity, and prospectivity. The universal negative rights of forbearance are knowable, stable, and scalable, and inÂdeÂpenÂdent of the particular levels of wealth in any society. The principles of contract require courts to enforce agreements made by others, and not to impose a set of ad hoc obligations whose content can be determined only through poÂlitÂiÂcal proÂcesses. The great bane of the modern administrative state is its need to extend vast

amounts of discretion to poÂlitÂiÂcal actors who are subject to poÂlitÂiÂcal forces that no abstract commitment to neutrality and expertise can overcome. Discretion is, to many people, the better part of valor. But not in public affairs, where discretion leads to the creation of indefiÂnite property rights that invite poÂlitÂiÂcal maneuvering of the types that traditionally have marred areas of labor and land use regulation. The recent Âdomestic forays on matters of fiÂnanÂcial reform and health care have produced bloated and ill-conceived legislation that promises to bring out the worst in administrative excesses, so long as that legislation is on the books. The question remaining is whether passage of these laws represents a high point in the scope of government, from which the tides will ebb, or whether it represents a new plateau, from which retreat will be extremely difÂfiÂcult. The great power shifts that took place in Congress at the 2010 midterm elections have not resolved this issue. They could signal a real change of collective will on the matter. Or they could simply indicate a change in the winds of poÂlitÂiÂcal fortune, in which poÂlitÂiÂcal favors will be conferred on a different class of undeserved beneficiaries. Only time will tell.

Older writings used to say that the system of private property abhors a vacuum. This meant that once politics is allowed to fill in the gaps, huge amounts ofÂenergy that should be directed toward productive activities will be turned to the grim task of seeing how to take advantage of the poÂlitÂiÂcal vulnerabilities of others. Every society has to sufÂfer that drag to some degree. But once those forces are unleashed and celebrated, it is only a question of time as to how long a poÂlitÂiÂcal order can prosper. Historically, we witness a constant battle between the forces of science and technology that expand the social pie, and the forces of faction and politics that eat away at those gains. Once upon a time, I was conÂfiÂdent that the forces of growth and prosperity could maintain the upper hand. But watching the flailing of poÂlitÂiÂcal actors, and the drift of our economic system, I am no Âlonger so sure.

Notes

Indexes

Notes

Introduction

1. Woodrow Wilson, ConÂgresÂsional Government: A Study in American Politics (1885).

2. Federal Trade Commission Act of 1914, Pub. L. No. 63-Â203, 38 Stat. 717 (1914) (codified as amended in 15 U.S.C. §§41–58 [2006]).

3. Pub. L. 63-Â212, 38 Stat. 730 (1914) (codified as amended in 15 U.S.C. §§12–27 [2002]).

4. 26 Stat. 209 (1890) (codified as amended in 15 USC §§1–7 [2004]). 5. Tariff Act of 1930 (Smoot-ÂHawley Tariff), Pub. L. No. 71-Â361, 46 Stat.

590 (codified as amended at 19 U.S.C. §§1202–1677k [2006]).

6. Pub. L. No. 71-Â798, 46 Stat. 1494 (1931) (codified as amended at 40 U.S.C. §§3141–3148 [2006]).

7. Pub. L. No. 72-Â154, 47 Stat. 169 (1932).

8. Pub. L. No. 72-Â65, 47 Stat. 70 (1932) (codified as amended at 29 U.S.C. §102 [2006]).

9. 49 Stat. 449 (1935) (codified as amended at 29 U.S.C. §§151–169 [2006]).

10. Pub. L. No. 73-Â10, 48 Stat. 31 (1933) (codified as amended at 7 U.S.C. §§601–624 [2006]).

11. Securities and Exchange Act of 1934, Pub. L. No. 73-Â291, 48 Stat. 881 (codified as amended at 15 U.S.C. §§78d [2002]).

12. Pub. L. No. 75-Â718, 52 Stat. 1060 (1938) (codified as amended at 29 U.S.C. §§201–219 [2006]).

13. Social Security Act of 1935, Pub. L. No. 74-Â271, 49 Stat. 620 (codified as amended in scattered sections of 42 U.S.C.).

14. Pub. L. No. 88-Â452, 78 Stat. 508, 42 U.S.C. §2701 (repealed 1981). 15. Pub. L. No. 88-Â352, 78 Stat. 241 (1964).

16. Social Security Amendments of 1965, Pub. L. No. 89-Â97, 79 Stat. 286 (codified as amended at 42 U.S.C. §§1395–1395ccc [2010])

17. Social Security Amendments of 1965, Pub. L. No. 89-Â97, 79 Stat. 286 (codified as amended at 42 U.S.C. §§1396–1396v [2010]).

18. See, e.g., Clean Water Act of 1972, Pub. L. No. 92-Â500, 86 Stat. 816 (codified as amended in 33 U.S.C. §§1251–1387 [2002]); Nat’l Environmental Policy Act of 1969, Pub. L. No. 91–190, 83 Stat. 852, 42 U.S.C. §§4321–4370; Clean Air Act of 1963, Pub. L. No. 88-206, 77 Stat. 392 (codified as amended in 42 U.S.C. §§7401–7671 [2006]).

19. Endangered Species Act of 1973, Pub. L. No. 93-Â205, 87 Stat. 884, 16 U.S.C. §§1531–1599 (2006).

20. Employee Retirement Income Security Act of 1974, Pub. L. No. 93- 406, 88 Stat. 829, 29 U.S.C. §§1001 et seq. (2000).

21. Occupational Safety and Health Act of 1970, Pub. L. No. 91-Â596, 84 Stat. 1590 (codified as amended at 29 U.S.C. §§651–78 [2006]).

22. Pub. L. No. 111-Â148, 124 Stat. 119 (2010).

23. Pub. L. No. 111-Â203, 124 Stat. 1376 (2010).

24. Labor-Management Relations Act, Pub. L. No. 80-101, 61 Stat. 136 (1947).

25. Administrative Procedure Act, Pub. L. No. 79-Â404 (1946).

26. See, for example, President Barack Obama, White House Press ConferenceÂ(Feb. 9, 2009), available at www.whitehouse.gov/the-Âpress-ofÂfice/press -conference -president (arguing that those “suggest[ing] that FDR was wrong to intervene back in the New Deal” are “fightÂing battles that I thought were resolved a pretty long time ago”).

27. See, for example, “Personal Spending Up, InÂcomes Stagnant,” CBS

News (Mar. 1, 2010), available at www.cbsnews.com/stories/2010/03/01/ business/main6255089.shtml (“For all of 2009, personal inÂcomes acÂtually fellÂby 1.7 percent, the weakest showing since the Great Depression year of 1938”).

28. See, for example, Motoko Rich, “Few New Jobs as Jobless Rate Rises to 9.8 percent,” New York Times A1 (Dec. 3, 2010).

29. F.ÂA. Hayek, The Road to Serfdom: The Definitive Edition (University of Chicago Press, 2007) (1944).

30. Milton Friedman, Capitalism and Freedom (University of Chicago Press, 2002) (1962).

1. The Traditional Conception of the Rule of Law

1. See F.ÂA. Hayek, The Road to Serfdom: The Definitive Edition (University of Chicago Press, 2007), at 118.

2. See, for example, the World Bank’s Policy for Development Policy LendingÂ(Aug. 2004), available at web.worldbank.org/WBSITE/EXTERNAL /PROJECTS/EXTPOLICIES/EXTOPMANUAL/0,,contentMDK:20240031menuPK:64701633 pagePK:64709096 piPK:64709108 theSitePK :502184,00.html.

3. See, for example, Guido Pincione, “The Constitution of Non-Â Domination,” 28 Social Philosophy and Policy 261 (2011).

4. For a hisÂtory of common-Âcarrier regulation, see Richard A. Epstein,

Principles for a Free Society: Reconciling Individual Liberty with the Common Good, ch. 10 (1998).

5. Jeremy Waldron, “Legislation and the Rule of Law,” 1 Legisprudence 91, 97 (2007) (defending legislation against the charge that it is inconsistent with the rule of law).

6. See Justinian, Institutes, Book I, Title 2, 6 (Oliver Thatcher, ed., 1907). 7. For a discussion of this tension, see Richard A. Epstein, The Natural

Law Influences on the First Generation of American Constitutional Law: Reflections of Philip Hamburger’s Law and Judicial Duty (forthcoming).

8. John Locke, Second Treatise of Government §25, at 18 (C.ÂB. Macpherson ed., Hackett 1980) (1690) (emphasis omitted).

9. Robert Lee Hale, “Coercion and Distribution in a Supposedly Non-Â Coercive State,” 38 Political Science Quarterly 470 (1923). See my critique of

Hale’s essay in Richard A. Epstein, Skepticism and Freedom: A Modern Case for Classical Liberalism 110 (2003).

10. Frank I. Michelman, “Property, Utility, and Fairness: Comments on the Ethical Foundations of ‘Just Compensation’ Law,” 80 Harvard Law Review 1165 (1967). Note that even the words “just compensation” are put in scare quotes.

11. On this connection, see Adam Smith, Lectures on Jurisprudence (Liberty Fund, 2010).

12. Locke, supra note 8, §125, at 66.

13. Id.

14. Id.

15. See Philip Hamburger, Law and Judicial Duty 322 (2008).

16. A.ÂV. Dicey, Introduction to the Study of the Law of the Constitution 110 (Liberty Classics, 8th ed., 1982) (1915).

17. Hayek, supra note 1, at 76, 80.

18. Thomas Bonham v. Col. of Physicians (Dr. Bonham’s Case), 8 Co. Rep.Â114 (1610).

19. See id. at 118a.

20. 1 William Blackstone, Commentaries *91; accord 2 id. at *156–157. 21. Lon L. Fuller, The Morality of Law 39 (1964).

22. See, for example, Waldron, supra note 5 at 109–112.

23. Henry J. Friendly, “Some Kind of Hearing,” 123 University of Pennsylvania Law Review 1267, 1279 (1975).

24. See, for example, Dean Milk v. Madison, 340 U.S. 349 (1951) (rejecting supposed health jusÂtifiÂcaÂtions for refusing to allow milk pasteurized in Illinois to be sold in Madison, Wisconsin).

25. Herbert Wechsler, “The Challenge of a Model Penal Code,” 63 Harvard Law Review 1097, 1102 (1952).

26. See Marc I. Miller and Ronald F. Wright, “The Black Box,” 94 Iowa Law Review 125, 129 (2008).

27. On the limitations, see Chapter 3 in this volume. 28. Miller and Wright, supra note 26 at 136.

29. See Richard A. Epstein, Bargaining with the State 5 (1993).

30. For discussion, see Richard A. Epstein, “Contingent Commissions in Insurance: A Legal and Economic Analysis,” 3 Competition Policy International 281 (2007).

31. Bristol-ÂMyers-ÂSquibb Deferred Prosecution Agreement (June 13, 2005),

available at www.usdoj.gov/usao/nj/press/files/pdffiles/deferredpros.pdf (“20.ÂBMS shall endow a chair at Seton Hall University School of Law dedicated to the teaching of business ethics and corporate governance”).

32. Baron de Montesquieu, The Spirit of the Laws 155–164 (Anne M. Cohler, Basia C. Miller, and Harold S. Stone, eds., Cambridge University Press, 1989) (1748).

33. For the classical articulation, see The Federalist (Clinton Rossiter, ed., 1961). Elsewhere, the Constitution protects federalism and states’ rights. The Tenth Amendment, which some modern cases have sought to make a “truism” (see United States v. Darby, 312 U.S. 100, 124 [1941]), provides: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” U.S. Const. Amend.ÂX.

34. John Locke, Second Treatise of Government, §144, at 76 (C.B Macpherson ed., 1980) (1690) (emphasis omitted).

2. Reasonableness Standards and the Rule of Law

1. Restatement (Third) of Torts: Liability for Physical Harm §3 (2005). This test is based on the famous decision of Learned Hand in United States v. Carroll Towing Co., 159 F.2d 169 (2d Cir. 1946), which has been championed in Richard A. Posner, “A Theory of Negligence,” 1 Journal of Legal Studies 29 (1972).

2. For a discussion of the risks, see Richard A. Epstein, Simple Rules for a Complex World 92–96 (Harvard University Press, 1995).

3. For the empirical support, see H. Laurence Ross, Settled Out of Court: The Social Process of Insurance Claims Adjustment 980–99 (Aldine, 2d ed., 1980).

4. 132 Eng. Rep.Â490 (C.P. 1837).

5. For a discussion of the permutations, see Richard A. Epstein, “The Many Faces of Fault in Contract Law: Or How To Do Economics Right, without Really Trying,” 107 Michigan Law Review 1461 (2009).

6. See Restatement (Second) of Torts, §§479–480.

7. See, for example, Charbonneau v. MacRury, 153 A. 457 (N.H. 1931). 8. James Henderson, “Judicial Review of Manufacturer’s Conscious De-

sign Choices: The Limits of Adjudication,” 73 Columbia Law Review 1531 (1973).

9. Larsen v. Gen. Motors Corp., 391 F.2d 495, 500 (8th Cir. 1968).

10. Clarence Morris, “Custom and Negligence,” 42 Columbia Law Review 1147, 1164–1165 (1942).

11. Campo v. Scofield, 95 N.E.2d 802, 804 (N.Y. 1950).

12. A. Mitchell Polinsky and Steven Shavell, “The Uneasy Case for Products Liability,” 123 Harvard Law Review 1437 (2010); W.ÂKip Viscusi, Reforming Products Liability (1992).

13. Kline v. 1500 Massachusetts Ave. Apartment Corp., 439 F.2d 477 (D.C. Cir. 1970).

14. See, for example, MacDonald v. Ortho Pharm. Corp., 394 Mass. 131, 139 (1985)

15. 129 S. Ct. 1187 (2009). For my comments, see Richard A. Epstein, “What Tort Theory Tells Us about Federal Preemption: The Tragic Saga of ÂWyeth v. Levine,” 65 Annual Survey of American Law 485 (2010).

3. Where Natural Law and Utilitarianism Converge

1. Justinian, Institutes, Book I Title 1, Sec. 3 (Peter Birks and Grant McLeod, eds., Cornell University Press, 1987) (“Iuris praecepta sunt haec: honeste vivere, alterum non laedere, suum cuique tribuere”).

2. For a critique of that position, see Robert Pippin, “Natural and Normative,” 138 Daedalus 3 (Summer 2009).

3. See David Hume, A Treatise of Human Nature, Book III (L.ÂA. SelbyÂBigge ed., 1949) (1740).

4. N.ÂE. Simmonds, The Decline of Juridical Reason: Doctrine and Theory in the Legal Order (Manchester University Press, 1984).

5. For discussion, see Saul Levmore, “Variety and Uniformity in the Treatment of the Good-ÂFaith Purchaser,” 16 Journal of Legal Studies 43 (1987).

6. ArÂisÂtotle, The Nicomachean Ethics, Book V (William David Ross, trans., Oxford University Press, 1998).

7. See, e.g., Mitchell v. Reynolds, 98 Eng. Rep.Â347 (1711).

8. Ronald H. Coase, “The Problem of Social Cost,” 3 Journal of Law and Economics 1 (1960).

9. See Richard A. Epstein, “The Many Faces of Fault in Contract Law: Or How To Do Economics Right, without Really Trying,” 107 Michigan Law Review 1461 (2009) (describing how ordinary language leads to efÂfiÂcient loss allocation rules).

10. Wikipedia, s.v. “Pecuniary externality,” en.wikipedia.org/wiki/Pecuniary_externality.

11. John Stuart Mill, On Liberty 72 (Everyman’s Ed., 1971) (1859).

4. Where Natural Law and Utilitarianism Diverge

1. For judicial discussion of the various differences, see Matsushita Elec. Ind. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986).

2. National Labor Relations Act of 1935, 74 Pub. L. No. 198, 49 Stat. 449, codified at 29 U.S.C. §159 (1935).

3. See, for example, Agricultural Adjustment Act of 1938, Pub. L. No. 75430, 52 Stat. 31 (1938).

4. For discussion, see Richard A. Epstein, Free Markets under Siege: Cartels, Politics, and Social Welfare (IEA, 2004), (Australia and New Zealand ed., 2004), (Hoover Institution, 2005).

5. For a classic account of this approach, see W.ÂD. Ross, The Right and the Good (Phillip Stratton-Lake, ed., Oxford University Press, 2002) (1930).

6. For discussion, see Richard B. Stewart, “The Reformation of American Administrative Law,” 88 Harvard Law Review 1667 (1975).

7. James M. Landis, The Administrative Process (Yale University Press, 1938).

8. For an extensive critique, see Richard A. Epstein, How Progressives Rewrote the Constitution (Cato, 2006).

5. Property Rights in the Grand Social Scheme

1. John Locke, Second Treatise of Government IX, §123 (C.ÂB. MacPherson, ed., Hackett, 1980) (1690).

2. See Thomas Hobbes, Leviathan 84 (Cosimo, 2009) (1651) (“The value of all things contracted for, is meaÂsured by the Appetite of the Contractors, and therefore the just value, is that which they be contented to give”).

3. For a vivid illustration of the caricature, see Peter S. Menell, “Intellectual Property and the Property Rights Movement,” 37 Regulation (Fall 2007); for my reply, see Richard A. Epstein, “The Property Rights Movement and Intellectual Property: A Response to Peter Menell,” 58 Regulation (Winter 2008).

4. See Justinian, Institutes, Book II, Title 1 (Peter Birks and Grant McLeod, eds., Cornell University Press, 1987).

5. For a detailed if over-Âthe-Âtop account of the dangers of this fragmentation, see Michael Heller, The Gridlock Economy: How Too Much Ownership Wrecks Markets, Stops Innovation, and Costs Lives (Basic Books, 2008), including discussion of the various castles on the Rhine River. The subtitle is misleading because most of the examples of gridlock stem from the use of the government permit power. For my comments on Heller, see Richard A. Epstein, “Heller’s Gridlock Economy in Perspective: Why There Is Too Little, Not Too Much, Private Property,” 53 Ariz. L. Rev. 51 (2011).

6. See Allnut v. Inglis, 104 Eng. Rep.Â206 (1810) (Ellenborough,ÂC.J.) (announcing the exception to the general rule that was incorporated into American law in Munn v. Illinois, 94 U.S. 113 [1876]). For a historical account, see Richard A. Epstein, Principles for a Free Society: Reconciling Individual Liberty with the Common Good 282–287 (Basic Books 1998).

7. For a discussion of the various approaches, see Duquesne Light Co. v. Barasch, 488 U.S. 299 (1988).

8. See Harold Demsetz, “Why Regulate Utilities?” 11 Journal of Law and Economics 1 (1968).

9. See Michael McConnell, “Public Utilities’ Private Rights: Paying for Failed Nuclear Power Projects,” 2 Regulation 35 (1988).

10. See, for example, Munn v. Illinois, 94 U.S. 113 (1876).

11. Telecommunications Act of 1996, Pub. L. No. 104-Â104, 110 Stat. 56, codified at 47 U.S.C. §151 et seq.

12. Verizon Commc’ns, Inc. v. FCC, 535 U.S. 467 (2002).

6. The Bundle of Rights

1. See, for example, James Harris, Property and Justice 32 (Oxford 1996) (“If deliberate hoÂmiÂcide is prohibited, it would never be even a prima facie defence that the murderer was using his own dagger”).

2. For one effort, see Richard A. Epstein, “Nuisance Law: Corrective Justice and Its Utilitarian Constraints,” 8 Journal of Legal Studies 49 (1979).

3. W.ÂA. Hunter, A Systematic and Historical Exposition of Roman Law 243 (Sweet and Maxwell, 4th ed., 1903).

4. For the usual formulations, see Restatement (Third) of Torts, Liability for Physical Harm §26 (2005).

5. See Stone v. Bolton [1950] 1 K.B. 201 (C.A. 1949), rev’d by Bolton v. Stone [1951] A.C. 850, [1951] 1 All E.R. 1078. For a more extended critique of this wa-

tershed decision, see Richard A. Epstein, “A Theory of Strict Liability,” 2 Journal of Legal Studies 151, 169–189 (1973).

6. See, e.g., Barker v. Lull Eng’g Co., 573 P.2d 443 (Cal. 1978) (allowing design defect action in face of product misuse).

7. Campo v. Scofield, 95 N.E. 2d 802, 804 (N.Y. 1950). 8. See John Stuart Mill, On Liberty 72 (1859).

9. See Rideout v. Knox, 19 N.E. 390, 391 (Mass. 1889).

10. Corp. of Birmingham v. Allen [1877] 6 Ch. Div. 284.

11. Rideout v. Knox, 19 N.E. at 390. The statute read: “SectionÂ1. Any fence, or other structure in the nature of a fence, unnecessarily exceeding six feet in height, maliciously erected or maintained for the purpose of annoying the owners or occupants of adjoining property, shall be deemed a private nuisance.”

12. Bamford v. Turnley (1860) 3 B.&S. 62; 122 Eng. Rep.Â25 (K.B.). For a more complete account of how this plays out in different physical settings, see Richard A. Epstein, “Property Rights, State of Nature Theory, and Property Protection,” 4 NYU Journal of Law and Liberty 1 (2008).

13. Bamford v. Turnley (1860) 3 B.&S. 62. Note that while Baron Bramwell has the individualist point clearly in mind, his formulation does not distinguish clearly between the Pareto and Kaldor-ÂHicks account of social welfare.

14. For an illustration of this error, see John Dawson, “Economic Duress,” 45 Michigan Law Review 253 (1947).

15. See Franklin Roosevelt, “The Economic Bill of Rights,” State of the ÂUnion Address (Jan. 11, 1944).

16. See, for example, Post v. Jones, 60 U.S. 150 (1856).

17. For discussion, see Wayne Brough, “Liability Salvage—by Private Ordering,” 19 Journal of Legal Studies 95 (1990).

7. Eminent Domain

1. U.S. Const. Amend. V.

2. Loretto v. TelePrompTer Manhattan CATV Corp., 458 U.S. 419 (1982).

3. Fisher v. City of Berkeley, 693 P.2d 261, 294–95 (Cal. 1984) (requiring reasonable economic return on investment).

4. Helmsley v. Borough of Fort Lee, 394 A.2d 65 (N.J. 1978) (invalidating ordinance that limited rent increases to 2.5 percent for want of administrative relief in hardship cases).

5. See Yee v. City of Escondido, 503 U.S. 519 (1992).

6. See Roberts v. Tishman Speyer Props., L.P., 13 N.Y.3d 270, 918 N.E.2d

900(2009).

7. See, for example, Armstrong v. United States, 364 U.S. 40 (1960). 8. 438 U.S. 104 (1978).

9. See Penn. Coal Co. v. Mahon, 260 U.S. 393, 415 (1922).

10. United States v. Bodcaw Co., 440 U.S. 202, 203 (1979) (appraisal fees); Dohany v. Rogers, 281 U.S. 362, 368 (1930) (attorney fees).

11. Kimball Laundry Co. v. United States, 338 U.S. 1 (1949).

12. See Richard A. Epstein, “Can Anyone Beat the Flat Tax?” 19 Social Philosophy and Policy 140 (2002).

13. See, for example, Head v. Amoskeag Mfg. Co., 113 U.S. 9 (1885); Olmstead v. Camp, 33 Conn. 532 (1866).

14. See Strickley v. Highland Boy Gold Mining Co., 200 U.S. 527 (1906) (aerial tram over scrub grass); Clark v. Nash, 198 U.S. 361 (1905) (irrigation ditch, absolutely necessary to serve land).

15. 348 U.S. 26 (1954).

16. 467 U.S. 229 (1984).

17. 545 U.S. 469 (2005).

18. For details on the response to Kelo, see Leonard Gilroy, “Kelo: One Year Later,” Reason Foundation (June 21, 2006), available at reason.org/news/ show/122269.html.

19. For a discussion of the issue, see Richard A. Epstein, “The Wright Stuff,” Regulation 8 (Spring 2007).

20. Wright Amendment Reform Act of 2006 (“Reform Act”), Pub. L. No. 109–352, 120 Stat. 2011 (2006); see also Love Terminal Partners, L.P. v. City of Dallas, 527 F. Supp. 2d 538, 543–47 (N.D. Tex. 2007) (rejecting antitrust challenges to the arrangements protected by the statute).

21. Airline Deregulation Act of 1978, Pub. L. No. 95–504, 92 Stat. 1705, codified at 49 U.S.C. 1551.

22. See, for example, Kansas v. United States, 797 F. Supp.Â1042, 1051 (D.D.C. 1992) (holding that “Congress imposed the Wright Amendment for rational reasons: to legislatively support a dispute resolution reached by the two cities”).

23. Reform Act §5.

24. 173 Fed. Appx. 931 (2d Cir. 2006).

4. 45 U.S.C. §54 (2005) (limiting assumption of risk defense in railroad accidents).

5. Second Employers’ Liability Cases, 223 U.S. 1, 50 (1912).

6. See Farwell v. Boston & Worcester R.R. Corp., 45 Mass. 49 (1842). The rejection of the doctrine came sometimes by statute, and other times by legislation, which was routinely upheld against constitutional attacks based on freedom of contract.

7. N.Y. Cent. R.R. v. White, 243 U.S. 188 (1917).

8. See, for example, Muller v. Oregon, 208 U.S. 412 (1908).

9. Howard Gillman, The Constitution Besieged 62 (Duke, 1993). For a criticism of relying on the class legislation approach and an exhaustive defense of

Lochner, see David E. Bernstein, Rehabilitating Lochner: Defending Individual Rights against Progressive Reform (University of Chicago, 2011).

10. See, for example, Allgeyer v. Louisiana, 165 U.S. 578, 589 (1897) (liberty of contract includes not only freedom from physical restraint, but the ability to enter into all contracts to gain a livelihood).

11. See, e.g., Lamson v. Am. Axe & Tool Co., 58 N.E. 585 (Mass. 1900). 12. For discussion, see Richard A. Epstein, “The Historical Origins and Economic Structure of Workers’ Compensation,” 16 Georgia Law Review 775

(1982).

13. See, for example, Richard A. Posner, “A Theory of Negligence,” 1 Journal of Legal Studies 29 (1972).

14. 9 Q.B.D. 357 (1882).

15. 43 & 44 Vict. Ch. 42.

16. See, for example, 1 T.ÂG. Shearman and A.ÂA. Redfield, A Treatise on the Law of Negligence, vi–vii (5th ed., 1898).

17. See, for example, Coppage v. Kansas, 236 U.S. 1 (1915); United States v. Adair, 208 U.S. 161 (1908).

18. Roscoe Pound, “Liberty of Contract,” 18 Yale Law Journal 454, 484 (1909).

19. National Labor Relations Act, Pub. L. No. 74-Â198, 49 Stat. 449, codified at 29 U.S.C. §151 (1935).

20. Fair Labor Standards Act, Pub. L. No. 75-Â718, 52 Stat. 1060, codified at 29 U.S.C. §201 et seq. (1938).

21. See National League of Cities v. Usery, 426 U.S. 833 (1976) (striking down the amendments to the FLSA), overruled by Garcia v. San Antonio Metropolitan Transit Auth. 469 U.S. 528 (1985) (sustaining the law).

22. For a glimpse of the issues, see Dep’t of Labor, Sheet no.Â22, Hours Worked under the Fair Labor Standards Act, www.dol.gov/esa/whd/regs/ compliance/whdfs22.pdf. For the full regulations, see 29 U.S.C. §§201–219 (2009).

23. 323 U.S. 134 (1944).

24. Fair Minimum Wage Act of 2007, Pub. L. No. 110-28Â .

25. See Review and Outlook, “The Lost Wages of Youth,” Wall Street Journal (Mar. 5, 2010).

26. See National Labor Relations Act, 29 U.S.C. §§151–169.

27. For a complete critique, see Richard A. Epstein, The Case against the Employee Free Choice Act (2009).

28. See NLRA, supra note 19 at §8(c).

29. See, for example, Alan Blinder, “Our Dickensian Economy,” Wall Street Journal (Dec. 17, 2010).

9. Positive-Sum Projects

1. See, for example, Ehrlich v. City of Culver City, 911 P.2d 429 (Cal. 1996).

2. See Nollan v. Cal. Coastal Comm’n, 483 U.S. 825 (1987).

3. For the mechanics, see U.S. Army Corps of Engineers, Compensatory Mitigation Rule: Improving, Restoring, and Protecting the Nation’s Wetlands and Streams, www.epa.gov/owow/wetlands/pdf/Mit_rule_QA.pdf.

4. Nollan, 483 U.S. 825 (1987).

5. Dolan v. City of Tigard, 512 U.S. 374 (1994).

6. See, for example, Rogers Mach., Inc. v. Washington County, 45 P.3d 966 (Or. Ct. App. 2002).

7. 444 U.S. 164 (1979).

8. See Frost v. R.R. Comm’n of State of Cal., 271 U.S. 583 (1926). That decision was gutted shortly thereafter in Stephenson v. Binford, 287 U.S. 251 (1932).

9. For a historical account of the regulation of jitneys, see Ross D. Eckert and George W. Hilton, “The Jitneys,” 15 Journal of Law and Economics 296 (1972) (detailing how local street regulation drove jitneys out of business).

10. In re Opinion of the Justices, 147 N.E. 681 (Mass. 1925).

11. 515 U.S. 557 (1995).

12. Mass. Gen. Laws Ann., ch. 272, §98 (1992).

13. Boy Scouts of Am. v. Dale, 530 U.S. 640 (2000).

14. 130 S. Ct. 2971 (2010). I wrote a brief for the CLS on behalf of the Cato

Is Inconsistent with the Rule of Law,” 3 NYU Journal of Law and Liberty 491 (2008).

2. See Withow v. Larkin, 421 U.S. 35 (1975).

3. See discussion in Marc I. Miller and Ronald F. Wright, “The Black Box,” 94 Iowa Law Review 125 (2008).

4. National Labor Relations Act, 29 U.S.C. §§151–169.

5. Under the statutory language in 29 U.S.C. §153(b), it is highly unclear whether three members of the NLRB can delegate their authority to the remaining two just before the third member rotates off. The two-Âmember board was upheld in Ne. Land Servs. v. NLRB, 560 F.3d 36 (1st Cir. 2009), petition for cert. filed, No. 09–213 (Aug. 18, 2009), and rejected thereafter in Laurel Baye Healthcare of Lake Lanier, Inc., v. NLRB, 564 F.3d 469 (D.C. Cir. 2009).

6. See NLRB, Annual Report, Vol. 14, at 32–33 (1949) (for an early statement).

7. See Am. Hosp. Ass’n v. NLRB, 499 U.S. 606 (1991). 8. Crowell v. Benson, 285 U.S. 22 (1932).

9. Martin v. Occupational Safety & Health Review Comm’n, 499 U.S. 144, 150 (1991).

10. 547 U.S. 715 (2006).

11. 33 U.S.C. §§1311, 1342(a).

12. See 39 Fed. Reg. 12119, codified at 33 C.F.R. §209.120(d)(1) (1974). 13. 33 C.F.R. §328.3(a)(2)–(7) (2004).

14. Id. at 2214 (“The average applicant for an individual permit spends 788 days and $271,596 in completing the proÂcess, and the average applicant for a nationwide permit spends 313 days and $28,915—not counting costs of mitigation or design changes”), citing David Sunding and David Zilberman, “The Economics of Environmental Regulation by Licensing: An Assessment of Recent Changes to the Wetland Permitting Process,” 42 Natural Resources Journal 59, 74–76 (2002).

15. Administrative Procedure Act of 1946, Pub. Law No. 79–404, codified at 5 U.S.C. §706.

16. 467 U.S. 837 (1984).

17. Natural Res. Def. Council, Inc. v. Gorsuch, 685 F.2d 718 (D.C. Cir. 1982).

18. See Telecommunications Act of 1996, 47 U.S.C. §§251 and 252 (1996). 19. 5 U.S.C. §706.

20. The two decisions in this matter, rendered some six years apart, were reported at 354 F.2d 608 (2d Cir. 1965) and 453 F.2d 463 (2d Cir. 1971).

21. 401 U.S. 402, (1971).

22. Id. at 416.

23. 15 U.S.C. §1381 et seq.

24. 463 U.S. 29 (1983).

12. Retroactivity

1. For my extended defense of that position, see Richard A. Epstein, “The Disintegration of Intellectual Property? A Classical Liberal Response to a Premature Obituary,” 62 Stanford Law Review 455 (2010).

2. See U.S. Const., Art. I, §8, cl. 8 (“To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries”).

3. See U.S. Const. Art. I, §10, cl. 1 (“No state shall .Â.Â. pass any .Â.Â. ex post facto LawÂ.Â.Â.”). The restriction of the ex post facto prohibition to criminal laws only was settled in Calder v. Bull, 3 U.S. 386 (1798).

4. See Stogner v. California, 539 U.S. 607, 632–33 (2003), which by a fiveto -four vote struck down under the Ex Post Facto Clause of the United States Constitution a state law that removed the protection of the statute of limitations for criminal prosecutions of child abuse.

5. Sturges v. Crowninshield, 17 U.S. (4 Wheat.) 122 (1819) (Marshall, C.J.). The Supreme Court refused to extend the Contracts Clause to prospective legislation in Ogden v. Saunders 25 U.S. (12 Wheat.) 213 (1827) (Marshall, C.J., dissenting). I have defended a modiÂfied version of the Marshall and Story position; see Richard A. Epstein, “Toward a Revitalization of the Contract Clause,” 51 University of Chicago Law Review 703, 729–747 (1984).

6. See Cal. Civ. Pro. §340.1, which allowed a one-Âyear window in which a person could bring a sexual abuse case that had been barred by the statute of limitation. The statute was held constitutional with respect to claims that had not been reduced to final judgment, but unconstitutional with respect to those which had been so litigated. See Perez v. Richard RoeÂ1, 52 Cal. Rptr. 3d 762 (Cal. App.Â2006).

7. See City of Boston v. Keene Corp., 547 N.E.2d 328 (Mass. 1989) (allowing a four-Âyear revival for asbestos-Âremoval claims that the local government brought against asbestos manufacturers).

8. 86 Stat. 150, 30 U.S.C. §901 et seq. (1970 ed. and Supp.ÂIV).

9. R.R. Ret. Bd. v. Alton R.R. Co., 295 U.S. 330 (1935).

10. 428 U.S. 1 (1976).

11. Id. at 16.

12. Id. at 18.

13. Id. at 15.

14. 524 U.S. 498 (1998).

15. See, for example, Swisher Int’l, Inc. v. Schafer, 550 F.3d 1046, 1052–55 (2008) (distinguishing Eastern Enterprises).

16. 290 U.S. 398 (1934).

17. Connolly v. Pension Benefit Guar. Corp., 475 U.S. 211 (1986); Pension Benefit Guar. Corp. v. R.A. Gray & Co., 467 U.S. 717 (1984).

18. Connolly, 475 U.S. at 227.

13. Modern Applications

1. Dodd-ÂFrank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111–203, 124 Stat. 1376 (2010).

2. Patient Protection and Affordable Care Act (ACA), Pub. L. No. 111–148, 124 Stat. 119 (2010).

3. For an excellent overview of the basic statutory provisions, see C.ÂBoyden Gray, “The Dodd-ÂFrank Wall Street Reform and Consumer Protection Act of 2010: Is It Constitutional?” 11 Engage: The Journal of the Federalist Society’s Practice Groups, 3 (2010).

4. Dodd-ÂFrank, at §111.

5. For the ambiguities in this concept, see Kenneth E. Scott, George P. Shultz, and John Taylor, Ending Government Bailouts as We Know Them

(Hoover Institution 2010).

6. Dodd-Frank, at §120(a).

7. Id. at §102 (4).

8. Id. at §113(a)(1).

9. Panama Refining v. Ryan, 293 U.S. 388 (1935).

10. A.L.A. Schechter Poultry Corp. v. United States, 295 U.S. 495 (1935). 11. Yakus v. United States, 321 U.S. 414 (1944).

12. Dodd-ÂFrank, at §113 (f). 13. Id. at §113 (h).

14. See Motor Vehicle Manufacturers’ Association v. State Farm Mutual Automobile InsuranceÂCo. 463 U.S. 29 (1983).

15. Pub. L. No. 111–148, 124 Stat. 119 (2010).

16. For a defense of this view, see Richard A. Epstein and David A. Hyman, “Controlling the Cost of Medical Care: A Dose of Deregulation,” available online at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1158547.

17. U.S. Census Bureau, Income, Poverty, and Health Insurance Coverage in the United States: 2009, at *22, available at www.census.gov/prod/2010pubs/ p60–238.pdf.

18. I.R.C. §5000A (2010). There are similar, and equally complex, mandates for employers who have more than fifty employees, at least one of whom receives some federal support. These have not generated anything like the protest to the individual mandates. See ACA at §1513 for the gory details.

19. Kaiser Health Tracking Poll, Questions 14–16, Kaiser Family Foundation (Aug. 2010), available at www.kff.org/kaiserpolls/upload/8093-ÂT.pdf (indicating that of fifÂteen elements of the ACA, the requirement “that nearly all Americans .Â.Â. have health insurance or pay a fine” is viewed least favorably by a substantial margin).

20. U.S. Const. art. I, §8, cl. 3.

21. See Wickard v. Filburn, 317 U.S. 111 (1942), which presented that fact pattern. The back-Âstory to the case was that wheat growers and cattle farmers vertically integrated to undermine the cartel that the Roosevelt administration sought to set up under the Agricultural Adjustment Acts.

22. See Virginia v. Sebelius, 702 F. Supp.Â2d 598 (2010).

23. Mancur Olson, The Logic of Collective Action: Public Goods and the Theory of Groups (1965).

24. Under the ACA and its amendments, health insurance will be mandatory, barring some exceptions, for all citizens by 2014. The penalty, to be phased in gradually, will reach a peak of the greater of $695 for an individual, $2,085 for a family, or 2.5 percent of household income. See Health Care and Education Reconciliation Act of 2010, Pub L. No. 111–152, 124 Stat. 1029, §1002.

25. See Alain Enthoven, Theory and Practice of Managed Competition in Health Care 5 (1988) (italics in original). For my criticism of the social-Â insurance model, see Richard A. Epstein, Mortal Peril: Our Inalienable Right to Health Care? 43–59 (1997).

26. See ACA at §1101 (concerning immediate access to insurance for uninsured individuals with preexisting conditions); and ACA §2704 (Prohibition of Preexisting Condition Exclusions or Other Discrimination Based on Health Care Status).

27. See ACA at §2702 (guaranteed availability of coverage).

28. Id. at §2701 (a)(1)(iii). The act also requires nonsmokers to subsidize smokers; id. at §2701 (a)(1)(iv).

29. Id. at §1311(a).

30. Id. at §1311(d).

31. Id. at §1311(c).

32. Id. at §2718(b). For the administration regulations, see 75 Fed. Reg., 230 (Dec. 1, 2010) (to be codified at 45 C.F.R. 158), available at edocket.access. gpo.gov/2010/pdf/2010–29596.pdf.

33. On which, see Fed. Power Comm’n v. Hope Natural Gas, 320 U.S. 591 (1944) and Duquesne Light Co. v. Barasch, 488 U.S. 299 (1989).

34. For discussion, see David R. Henderson, Mini-ÂMed Plans, Brief Analysis No. 727, National Center for Policy Analysis (Oct. 21, 2010), available at www.ncpa.org/pdfs/ba727.pdf.

35. Janet Adamy, “McDonald’s May Drop Health Plan,” Wall Street Journal (Sept. 30, 2010).

36. Dept. of Health and Human Servs., Office of Consumer Information and Insurance Oversight Guidance (Dec. 10, 2010), available at www.healthcare.gov/center/regulations/guidance_limited_beneÂfit_2nd_supp_bulletin_120910.pdf.