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Specialize the Judge, Not the Court: A Lesson from the German Constitutional Court

The federal courts of appeals are in the midst of a crisis. The exploding volume of cases in those courts and the increasing complexity of the law present a real threat to the quality of appellate justice. Borrowing Adam Smith’s basic insight about the division of labor, many commentators have argued that the federal appellate courts might manage this crisis through greater specialization. The particular mode of specialization that has come into favor is the establishment of appellate courts with limited and exclusive jurisdiction over a set of subject matters. An example of such a court is the Court of Appeals for the Federal Circuit, and the apparent success of this court in the rationalization and harmonization of patent law has engendered proposals for many other specialized courts of appeals.

However, there are a host of problems with relying on such “specialized courts,” including judicial “tunnel vision,” the lack of cross-pollination of legal ideas, judicial capture by special interests, and excessive judicial policymaking. Commentators often defend their proposals for more specialized courts by pointing to the success that some European countries have had with highly specialized appellate judiciaries. But the apparent success of the European experience with specialized courts may be peculiar to the civil law philosophy of judging; borrowing a distinctly civil law solution for the American common law landscape may not be successful.

This Note proposes a different mode of specialization: staffing cases with a mix of expert and non-expert judges. The German Constitutional Court has used a similar system for many years. Since this solution is being borrowed from a constitutional court, which is far more like an American court than a civil law court, problems of translation are reduced. The proposal balances our desire for generalist judges with the need for judicial expertise as law grows increasingly complex. It helps solve the problem of exploding caseloads by allowing the federal appellate courts to take on more judges without sacrificing intra-circuit coherence of federal law. It achieves the goal of expertise by leveraging the differing abilities and interests of appeals court judges. While doing all this, the proposal also avoids many of the problems with the use of specialized courts of limited, exclusive jurisdiction.

A Normative Theory of Business Bankruptcy

It is widely agreed that capital cost reduction should be among the goals that a business bankruptcy law should pursue. This Essay argues that capital cost reduction should be the only goal, and that a bankruptcy system seriously committed to this goal would be both smaller and less centralized than the current U.S. Bankruptcy Code. In particular, a bankruptcy law that sought to reduce the cost of debt capital to firms would (a) require the trustee or debtor in possession to maximize the value of the insolvent firm rather than the payoffs of general creditors; (b) permit preferences (but continue to bar fraudulent conveyances); (c) permit suppliers and customers to contract for the right to cease dealing with a firm that has become insolvent; (d) not subsidize the use of expert professionals by junior creditors, but sometimes subsidize expert use by seniors; and (e) permit parties in the lending agreement to induce the debtor to use the bankruptcy procedure, either Chapter 7 or Chapter 11, that turns out to be optimal in the state of the world in which insolvency occurred. 

The Constitution in Two Dimensions: A Transaction Cost Analysis of Constitutional Remedies

This Article reveals the underappreciated role of liability rules in constitutional law. Conventional constitutional theory insists that constitutional entitlements require, by their nature, property rule protection. That is, they can only be taken with the owner’s consent; nonconsensual takings can be enjoined. This Article shows that many constitutional values are in fact protected by liability rules, which allow for forced transfers followed by payment of compensation. Substantive entitlements form one dimension of constitutional law. The various ways in which they are protected against transfers form the second dimension. The full picture of constitutional law only emerges from looking at both.

The Article locates liability rules in diverse areas such as the First Amendment prior restraint doctrine, the Third Amendment, Fourth Amendment search and seizure rules, the Due Process Clauses, the Takings Clause of the Fifth Amendment, the Self-Incrimination Clause of the Fifth Amendment, and the Excessive Bail Clause of the Eighth Amendment. Thus constitutional theory’s insistence on property rule protection fails account for how some constitutional values are actually protected. This Article develops a richer understanding of the relationship between constitutional remedies and constitutional entitlements. The transaction cost perspective on constitutional law reveals previously unnoticed connections between various doctrines, and provides a new criterion for evaluating their strengths and weakness.

This Article also presents new evidence that the Constitution does not require property rule protection and can be satisfied with liability rules. It shows that the oft-overlooked Third Amendment explicitly mandates property rule protection for the entitlement it defines. This property rule, together with the Takings Clause’s explicit liability rule, shows that for other entitlements the Constitution does not require any particular form of protection. The explicit property rule and the explicit liability rule define the second dimension in constitutional law.

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