Article

Powers, But How Much Power? Game Theory and the Nondelegation Principle

Of all constitutional puzzles, the nondelegation principle is one of the most perplexing. How can a constitutional limitation on Congress’s ability to delegate legislative power be reconciled with the huge body of regulatory law that now governs so much of society? Why has the Court remained faithful to its intelligible principle test, validating expansive delegations of lawmaking authority, despite decades of biting criticism from so many camps? This Article suggests that answers to these questions may be hidden in a surprisingly underexplored aspect of the principle. While many papers have considered the constitutional implications of what it means for Congress to delegate legislative power, few have pushed hard on the second part of the concept: what it means for an agency to have legislative power.

Using game theory concepts to give meaning to the exercise of legislative power by an agency, this Article argues that nondelegation analysis is actually more complicated than it appears. As a point of basic construction, a delegation only conveys legislative power if it (1) delegates lawmaking authority that is sufficiently legislative in nature, and (2) gives an agency sufficient power over the exercise of that authority. But, again using game theory, this Article shows that an agency’s power to legislate is less certain than it first appears, making satisfaction of this second element a fact question in every case.

This more complicated understanding of the nondelegation principle offers three contributions of practical significance. First, it reconciles faithful adherence to existing theories of nondelegation with the possibility of expansive delegations of lawmaking authority. Second, it suggests a sliding-scale interpretation of the Court’s intelligible principle test that helps explain how nondelegation case law may actually respect the objectives of existing theories of nondelegation. Third, it identifies novel factors that should (and perhaps already do) influence judicial analysis of nondelegation challenges.

The Death Penalty as Incapacitation

Courts and commentators give scant attention to the incapacitation rationale for capital punishment, focusing instead on retribution and deterrence. The idea that execution may be justified to prevent further violence by dangerous prisoners is often ignored in death penalty commentary. The view on the ground could not be more different. Hundreds of executions have been premised on the need to protect society from dangerous offenders. Two states require a finding of future dangerousness for any death sentence, and over a dozen others treat it as an aggravating factor that turns murder into a capital crime.

How can courts and commentators pay so little heed to this driving force behind executions? The answer lies in two assumptions: first, that solitary confinement and life without parole also incapacitate, and second, that prediction error makes executions based on future risk inherently arbitrary. Yet solitary confinement and life without parole entail new harms—either torturous isolation or inadequate restraint. Meanwhile, the problem of prediction error, while significant, can be greatly reduced by reevaluating future dangerousness over time.

This Article illuminates the remarkable history, influence, and normative import of the incapacitation rationale, and shows how serious engagement with the incapacitation rationale can lead to practical reforms that would make the death penalty more fair. It concludes by highlighting several of the most promising reforms.

The Securities Law Implications of Financial Illiteracy

Every financial literacy study conducted over the last few decades concurs: Americans, including American investors, are financially illiterate. This Article argues that America’s financial illiteracy poses a significant, widespread, and long-term challenge for our federal securities regime because that regime is premised almost entirely on disclosure as the best form of investor protection and, by extension, on investors’ ability to understand disclosure. By advancing a typology of investors and their disclosure needs, this Article further argues that we may have significantly underestimated the extent of the financial illiteracy problem based on at least two flawed assumptions. First, we have presumed that the financial illiteracy problem is limited to retail investors—individuals (as opposed to institutions) who invest directly in the securities markets and who represent a small segment of the overall investor population. However, such a presumption fails to sufficiently account for the literacy concerns of individuals who invest indirectly in the market in the form of holdings in mutual funds, pension funds, and other institutions, and who comprise a substantial segment of the market. The second flawed presumption relates to the notion that disclosure is not intended for the individual retail investor. Many insist that disclosure is intended for sophisticated institutional investors and financial intermediaries who provide signals to less sophisticated investors about suitable investment choices. However, the anecdotal and empirical evidence suggests not only that our presumptions about the sophistication of institutional investors and intermediaries are debatable, but also that such actors do not perform their signaling function as effectively or as consistently as we presumed. Thus, the effort to minimize the financial literacy problem through reliance on these other investors is misguided. Finally, this Article contends that the very fact that regulators have sought to combat financial illiteracy for more than two decades without appreciable changes in financial literacy rates suggests that the problem may be long-term and that the reform of choice—investor education—may require supplementation. Based on these conclusions, this Article insists that we must grapple much more seriously with the financial literacy problem and offers suggestions about the best path forward.

©Virginia Law Review Association. All rights reserved.