Theorists have offered invisible-hand justifications for a range of legal and political institutions, including the separation of powers, free speech, the adversary system of litigation, criminal procedure, the common law, and property rights. These arguments are largely localized, with few comparisons across contexts and no general account of how invisible-hand justifications work. This essay has two aims. The first is to identify general conditions under which an invisible-hand justification will succeed. The second is to identify several theoretical dilemmas that arise from the structure of invisible-hand justifications and that cut across local contexts. These are the dilemma of norms, which arises because norms of truth-seeking, ethical action or altruism can both promote and undermine the workings of the invisible hand; the dilemma of second best, which arises because partial compliance with the conditions for an invisible-hand justification can produce the worst of all possible worlds; and the dilemma of verification, which arises where theorists claim that an invisible-hand process functions as a Hayekian discovery procedure — a claim that is empirical but pragmatically unverifiable.
Issue 6
Habeas Corpus, Due Process and the Suspension Clause: A Study in the Foundations of American Constitutionalism
Ever since the attacks of September 11, 2001, constitutional scholars have been exploring the controversial issues surrounding the so-called “Emergency Constitution.” One of the very few provisions of the Constitution that explicitly contemplates such emergency situations is Article I, section 9, concerning the writ of habeas corpus. That provision prohibits suspension of the “Great Writ,” except “when in cases of [r]ebellion or [i]nvasion the public [s]afety may require it.”
The writ of habeas corpus has long stood as the primary weapon against the development of tyranny. It enables a court to demand that the executive produce individuals it is detaining and explain the lawful basis for that detention, and to order the detainees’ release if it finds the confinement to be unlawful. Absent the availability of habeas corpus, there would exist no legal means of preventing those in power from arresting any individual they want, for as long as they want, regardless of the legitimacy of the arrest. Yet pursuant to the so-called Suspension Clause, in times of rebellion or invasion the government is authorized to suspend the writ.
Highly respected scholars have recently engaged in an intense debate over the meaning and implications of the Suspension Clause. All of them, however, have seriously missed the mark, because all have assumed the continuing validity of that Clause. In this Article, we argue that the Due Process Clause of the Fifth Amendment effectively repeals the Suspension Clause. We reach this conclusion for two reasons: first, the Suspension Clause indisputably authorizes summary detention without the availability of any form of hearing before a neutral adjudicator. Whatever “due process” means at its outer fringes, there is no doubt that such a practice deprives an individual of liberty without due process of law. Yet the Due Process Clause, on its face, is unlimited in its application; it contemplates no exceptions, when an individual is to be deprived of life, liberty or property. Thus, purely as a matter of textual construction, the Due Process Clause, contained in an amendment, supersedes the Suspension Clause, which appears in the body of the Constitution. Moreover, it is important to recognize that the Suspension Clause authorizes tyrannical practices wholly inconsistent with and undermining of foundational precepts of American Constitutionalism. This concept dictates a governmental commitment to the rule of law and to limited governmental authority over its citizens. The Due Process Clause should be deemed to protect these core values. After establishing the supremacy of the Due Process Clause, the Article carefully explores the manner in which the Due Process Clause should be found to limit coercive governmental authority in times of national crisis.
Taxing Punitive Damages
There is a curious anomaly in the law of punitive damages. Jurors assess punitive damages in an amount that they believe will best “punish” the defendant. But, in fact, defendants are not always punished to the degree that the jury intends. Under the Internal Revenue Code, punitive damages paid by business defendants are tax deductible and, as a result, these defendants often pay (in real dollars) far less than the jury believed they deserved to pay.
To solve this problem of under-punishment, many scholars and policymakers, including President Obama, have proposed making punitive damages nondeductible in all cases. In our view, however, such a blanket nondeductibility rule would, notwithstanding its theoretical elegance, be ineffective in solving the under-punishment problem. In particular, defendants could easily circumvent the nondeductibility rule by disguising punitive damages as compensatory damages in pre-trial settlements.
Instead, the under-punishment problem is best addressed at the state level by making juries “tax aware.” Tax-aware juries would adjust the amount of punitive damages to impose the desired after-tax cost to the defendant. As we explain, the effect of tax awareness cannot be circumvented by defendants through pre-trial settlements. For this and a number of other reasons, tax awareness would best solve the under-punishment problem even though it does come at the cost of enlarging plaintiff windfalls. However, given the defendant-focused features of current punitive damages doctrine, this cost is not particularly troubling.