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JUDICIAL SEMINARS:
ECONOMICS, ACADEMIA, AND
CORPORATE MONEY IN AMERICA
Nan Aron*
Barbara Moulton
Chris Owens
Business must accept--indeed, embrace--the fact that the Judiciary must be lobbied as intensively as the Executive or the Legislature if business interests are to be given fair consideration in the adjudicative process.
Leslie Cheek, Senior Vice-President, Crum & Forster Insurance
Liability in the 1990's: A Risk-Taker's Perspective
Educational programs for judges have mushroomed during the last few decades. Today, numerous public and private organizations sponsor seminars, workshops, or conferences specifically designed to enhance the knowledge of judges in particular areas of the law. The sponsoring groups run the gamut from the Federal Judicial Center, the governmental agency officially responsible for the continuing education of federal judges, to law schools, foundations, and advocacy organizations. Corporate and foundation officials have capitalized on the growth of these programs. A review of the 1988 and 1990 federal judicial disclosure forms revealed that two of the more popular seminars for federal judges involve law and economics and "civil justice reform." Run by the Law and Economics Center at George Mason University School of Law and Yale Law School (respectively), and underwritten by corporations and like-minded foundations, these programs are offered completely free-of-charge, and the sponsors cover all travel, lodging, and meal expenses for the most powerful players in the civil justice system--judges.
Members of the judiciary are more eager than ever to be "educated" in increasingly complex areas of the law. Thus, all-expenses-paid programs--which eliminate the need for judges to procure their own funding or undergo the bureaucratic red-tape of getting approval to attend--can be particularly alluring. All privately-run judicial education programs raise concern over program bias for judges. Ideology can easily--and often does--penetrate the content and shape of such programs, whether intentionally or not. What may appear in theory to be objective and balanced "educational" offerings may often in actuality be closer to partisan lobbying opportunities. The judiciary's unique role in our society demands careful line-drawing between the two. When corporate sponsorship is involved, such line-drawing is especially important, because corporations are frequent litigants and thus have a significant financial stake in the judiciary's overall approach to legal decisionmaking.
The Law and Economics Center at George Mason University School of Law (GMU) is dedicated to teaching the economic analysis of law to lawyers and judges. It was founded by Henry Manne in 1974 at the University of Miami School of Law, where he was then a professor. After a brief stop at Emory University, Manne brought the Center to Virginia in 1986, when he became dean of GMU's Law School. Manne is a passionate adherent of the Chicago School of economics and has transformed George Mason into a bastion of law and economics thinking.
Manne recognized early the importance of educating the judiciary in law and economics in order to make the theory the pillar of legal decisionmaking. Thus, in 1976 Manne's Center began hosting annual "economics institutes" for federal judges. Though it also runs "law institutes" for economists and "economics seminars" for law professors (who, the Center pointedly notes, "in turn have educated a whole new generation of lawyers"), federal judges remain the Center's most important audience. An appeal to funders included in the Center's 1990 annual report explicitly articulates the rationale for this focus on the judiciary: "Changes in the federal bench and the issues it confronts create a constant demand for our programs. An investment in the Law and Economics Center ensures that economic analysis remains an integral part of legal decisionmaking."1 According to the Center's 1991 report, 376 judges had been schooled in economic theory through the Center's programs as of the end of 1991.2 This number, though cumulative, represents approximately 40% of the current federal judiciary. (See Appendix A for a cumulative list of participants of the first through seventeenth basic "economics institutes.") [Ed. note: A more recent estimate puts that figure at 2/3rds.]
Although closely affiliated with GMU, the Law and Economics Center is run independently and is supported entirely by private donations.3 Corporate interests provide a significant share of the Center's funding. In 1991, for example, when the Center spent $380,000 in "direct" expenses for federal judges' seminars, 31% of the Center's total income of $967,917 came from corporate contributors. These donors included corporate giants Exxon, General Motors, Bethlehem Steel, ITT, and Pfizer, Inc., the General Electric and Mobil Foundations, and the Monsanto Fund.4 Most of the remainder of the Center's 1991 budget (65%) came from independent foundations, including Olin, Bradley, and Scaife, which have been key players in efforts to mold a jurisprudence more favorable to business interests.5 The Center's basic "economics institute" for federal judges is held once a year, spans a two-week period and is designed to familiarize participants with the fundamental tools of microeconomic theory.6 Judges are instructed in such matters as "Prices, Markets, Information Costs," "How Competitive Markets Work," "Statistical Inference," "The Modern Corporation," "Intractable Questions in Economics," and the like.7 Classes are held six mornings per week, with some afternoon and evening classes as well. Interchange between the judges and the faculty members is strongly encouraged; thus, all meals are taken as a group.8 Nineteen judges attended the 1991 basic seminar, which cost the Center $106,356.9
The Center also offers several advanced economics courses for judges. In 1991, it conducted "The Economics of Risk, Injury, and Liability" and "Quantitative Methods," which 21 and 13 judges attended respectively.10 In addition, the Center augmented its traditional economics fare with the "Basic Science and Public Health" seminar co-sponsored by the Federal Judicial Center. Although the course was largely devoted to scientific principles (the topic of one lecture was A Historical Review of Physics), several legal issues were explored. One lecture, for example, was devoted to "mainstream" versus "junk" science, a topic receiving much attention recently from civil justice "reform" activists, such as the Manhattan Institute's Peter Huber, who seek to limit the use of expert testimony in court.11 Other law-related lectures included Evaluating Expert Testimony by Scientists and Reasonable Risk Policy/Cost-Benefit Analysis, which was taught by tort "reform" proponent Professor Kip Viscusi of Duke University's Department of Economics.12
The Center's programs for judges are often held at resort locations. While housed at the University of Miami, for example, the Center frequently conducted its seminars in Key Biscayne, Florida. In 1991, the basic economics institute was held in Tucson, Arizona, the two advanced economics courses in Marco Island, Florida, and the science course in Naples, Florida.13 Hosting the seminars in such surroundings is expensive. According to 1990 judicial disclosure forms, the Law and Economics Center reimbursed several judges more than $3,500 each for their seminar expenses. (Most judges did not list the amount of reimbursement, and some who were listed in the Law and Economics Center's 1990 annual report as participants of at least one seminar did not report any expense reimbursement.) Whether the resort locations help in enticing judges to take courses is impossible to assess, but the programs are apparently quite popular, according to the glowing comments recited in the Center's promotional literature. One judge stated: "I am a great fan of [the] programs. I have urged all of our new judges to apply. Indeed, these courses have been most helpful to me in a number of cases that I have tried."14 Another added that "[t]he Center makes an important contribution to the competence of the whole judiciary through its programs."15 Still another was even more pointed about the Center's influence: "As a result of my better understanding the concept of marginal costs," he said, "I have recently set aside a $15 million anti-trust verdict."16
Critics long ago decried what they viewed as an exceptional bias in the Center's seminars toward advancing the financial interests of the Center's corporate funders. Nonetheless, the programs have received surprisingly little official scrutiny. In 1980, the Institute for Public Representation (IPR), a public interest clinical program at Georgetown University Law Center, submitted a petition to the Judicial Conference of the United States regarding privately-sponsored judicial education programs. The petition singled out the Center's economics seminars, explaining that the Center, Henry Manne, and the majority of its lecturers "are committed to the view that the 'free market' should be left unregulated and that governmental intervention in the economy is rarely, if ever, justified."17 Moreover, as the petition pointed out, the legal and theoretical views dominating the seminars would, if adopted by judges, greatly benefit the Center's corporate sponsors.18 Citing several canons of the Code of Judicial Conduct, the IPR petition identified a number of ethical concerns raised by the law and economics seminars:
IPR's petition was referred to the Judicial Conference's Advisory Committee on Codes of Conduct, which declined to investigate the concerns raised. In fact, in a responsive letter to the clinic, Advisory Committee Chairman Judge Howard Markey stated that "[t]he requested investigation of a private educational institution would be unauthorized, inappropriate, and productive of serious questions concerning academic freedom and First Amendment rights."21 The letter referred the clinic to Advisory Committee on Codes of Conduct, Advisory Opinion No. 67, Attendance at Educational Seminars, which was drafted shortly before IPR's petition was submitted and was not available to the clinic beforehand. The opinion states that payment of expenses to attend "non-government sponsored seminars" constitutes a gift under the Code of Judicial Conduct, and that judges may accept the gift as long as it is "'awarded on the same terms applied to other applicants.'"22 Specifically, it explains that "[t]he education of judges in various academic disciplines serves the public interest. That a lecture or seminar may emphasize a particular viewpoint or school of thought does not in itself preclude a judge from attending. Judges are continually exposed to competing views and arguments and are trained to weigh them. It would be improper to participate in such a seminar if the sponsor, or source of funding, is involved in litigation, or likely to be so involved, and the topics covered in the seminar are likely to be in some manner related to the subject matter of such litigation.... Judges who accept invitations to participate in such seminars, having been satisfied that no impropriety or appearance thereof is present, must report the reimbursement of expenses and the value of the gift on their financial disclosure reports."23 Judge Markey's letter noted that the "advice in Opinion 67 that judges invited to educational seminars inform themselves is deemed fully adequate."24
Shortly after IPR had submitted its petition to the Judicial Conference, the Legal Times reported that Manne had allegedly stopped using corporate money to fund the judicial seminars.25 A recent list of Center contributors indicates that "[a]ll direct expenses for judges programs are paid by private foundations not affiliated with corporations."26 This bookkeeping change, however, does not dispel concerns about the Center's programs. Questions linger about the relationship between the Center's overall funding and the bias framing its seminars, as corporations remain a mainstay of the Center's financial support. Moreover, many of the independent foundations that support the Center were initially established with corporate money and remain wedded to their creators' staunch "free market" ideologies. Olin, for example, is still run by founder John Olin's hand-picked successor and ideological soulmate, William Simon, and the young Bradley Foundation (created in 1985) is committed "to commemorat[ing] Lynde and Harry Bradley by preserving and extending the principles and philosophy by which they lived and upon which they built the company."27
Manne categorically rejects the notion that either he or the Center promotes anything but a neutral approach to the economic analysis of the law. This disclaimer, however, is belied by the Center's own program descriptions. In an early annual report, the Center proudly touted its programs as avoiding "'the monotonous political liberalism that has biased academic economics,'" and claimed that they focused instead on "'considerations of individual choice, private property, freedom of contract, and the market allocation of resources.'"28 Manne's more recent pronouncements regarding what constitutes "good" economics also have a distinct ideological edge. In an issues paper he prepared for the Washington Legal Foundation in 1985, Manne lamented that "few lawyers know how to develop effective economic arguments." This inability, he continued, "cut[s] two ways, since there is plenty of 'bad' economics available too. As it happens, however," he said, "the very best arguments in modern economic scholarship support the side of private property protection and open markets. Thus, a failure to develop the skills and techniques for integrating good economic theory into law in effect discriminates most against those who are opposed to government control of the economy."29 (Emphasis added.)
The concern about seminar bias is particularly acute today. Both Presidents Reagan and Bush appointed a number of extremely young lawyers to the federal judiciary. Many, particularly those nominated to district courts, were chosen more for their political activism and financial contributions to the Republican Party than for their distinctive careers in the law. As such, they brought to the bench little by way of legal experience or judicial vision. According to one longtime federal judge, these individuals may be particularly susceptible to programs like the economics institutes, which are intellectually stimulating but subtly ideological. Of the 19 judges attending the 1991 basic economics institute, 14 were Reagan or Bush appointees.30 Eight of the attendees were Reagan/Bush district court appointees, most of whom had been on the bench for only a few years.
"EDUCATING" FEDERAL JUDGES
To determine how pervasive the private funding of judicial education programs is, the Alliance reviewed the 1989 and 1990 financial disclosure forms of all federal judges. Every member of the federal judiciary must file an annual disclosure form, on which must be listed all reimbursements or gifts from private organizations. Expenses to attend judicial education programs are considered gifts.
Several disparate organizations offer such seminars. Until recently, for example, the Aspen Institute hosted one in international human rights law. Funding for the programs came from various foundations. Additionally, since 1977 the Danforth Foundation, using its own funds, has run seminars for federal judges and educators entitled "Law and Education."
Vanderbilt University's Institute for Public Policy Studies (VIPPS) periodically hosts judicial seminars on health care issues. In 1989, it held a medical malpractice seminar which discussed such topics as "The Role of the Tort System in Providing Optimal Care and Compensation for Patients," and "Issues of Causation in Medical Malpractice." Until recently, the programs were funded by the Hospital Corporations of America (HCA) Foundation, an association of business organizations.
One of the more extreme privately-funded programs, at least in terms of ideological bias, is the Seminar on the Constitution periodically run by the Center for Judicial Studies. The Center is headed by James McClellan, who also runs the Jesse Helms Center at [Wingate] College, and publishes Benchmark, a conservative newsletter whose consulting editors include Robert Bork, Ed Meese, and William Bradford Reynolds. Benchmark is arguably best known for its assault on the Reagan Justice Department's Supreme Court litigation strategies: it argued that the Department was sacrificing conservative principles in order to win cases.
The constitutional seminars bring together federal judges and constitutional scholars to discuss such issues as the original intent doctrine and the Federalist Papers. The Center hosted two such seminars between 1989 and 1990, both funded by the Liberty Fund, a libertarian think tank dedicated to the "study of the ideal of a society of free and responsible individuals." Judges listing the Center for Judicial Studies on their financial disclosure forms included appeals court judges Edith Jones (Fifth Circuit), Alex Kozinski (Ninth Circuit), Michael Kanne and Frank Easterbrook (Seventh Circuit), Bobby Baldock (Tenth Circuit), Emmet Cox (Eleventh Circuit), and Patrick Bowman (Eighth Circuit).
Yale Law School's civil liability conferences, funded by Aetna Life and Casualty Foundation, are also prime examples of efforts to "inform" the judiciary on matters of particular concern to business interests. The conferences are run by the Program on Civil Liability, which is headed by George Priest, the John M. Olin Professor of Law and Economics. A graduate of the University of Chicago School of Law, Priest was also a law and economics fellow at Chicago in the mid-1970s. He later served on President Reagan's Commission on Privatization, which reviewed federal government functions to determine which could be performed better by private entities.31 Priest is an avowed supporter of comprehensive reform of the tort system, and has published and lectured frequently on the topic. One of his more controversial suggestions is to limit the use of civil juries to only those cases in which decisions by lay people are truly necessary. These include, he says, suits against the government for violation of citizens' rights, defamation cases, and litigation involving uncommon and devastating injuries--cases which make up only about 5% of all civil jury trials.32
The Program on Civil Liability has hosted civil liability conferences periodically since the mid-1980s. Judges comprise the majority of the audiences at the conferences, although academics and members of the bar also participate.33 The last two conferences, held in 1988 and 1990, took place over two-day periods and consisted of several "sessions." Each session included the presentation of a principal paper, followed by a critique by two commenters, and an open discussion with audience members. "Issues in Civil Procedure: Advancing the Dialogue" was the subject of the 1988 conference, which more than 150 individuals attended. Topics discussed included the need for regulating scientific evidence, the "court congestion problem," and discovery abuse. The 1990 conference was entitled "Modern Civil Procedure: Issues in Controversy." Among the topics examined were mass toxic tort litigation and improving Congress's ability to regulate the use of judicial resources. Twenty-six federal district court, nine federal courts of appeal, and twenty-four state court judges attended the conference.34 (See Appendix A for list of participants at the 1990 conference.) The 1988 and 1990 conference papers were published in the Boston University Law Review and the Law and Contemporary Problems journal, respectively. Aetna financed the distribution of these journals to all federal judges.
Like the Law and Economics Center seminars, questions about corporate bias have arisen about the Yale conferences. One Yale faculty member, for example, described the Program on Civil Liability as a "mouthpiece of the insurance industry." Although Yale strives to provide a diversity of viewpoints at the conferences, Aetna's exceptionally visible role casts a decidedly pro-corporate shadow over the programs. Along with providing significant funding for the programs, Aetna's senior managers play an active role in seminar presentations. At the 1988 conference, for example, William O. Bailey, Aetna's Vice-Chairman, joined Humphrey Taylor, President of Louis Harris & Associates, Inc., in presenting the results of a Harris poll of federal and state judges on civil procedure issues.
Aetna financed the poll, which consisted of interviews with 200 federal and 800 state judges,35 and helped develop its format, with the pollsters contacting "numerous representatives of Aetna Life and Casualty for their ideas and suggestions for issues to be addressed in the survey."36 Bailey told the conferees that Aetna was involved in efforts to seek responsible change in the legal system and that the poll was part of Aetna's continuing civil justice reform work. He noted that previous polls had showed public concern about the costs and delays in tort litigation. And he added that judges, rather than legislators, can have the most effect in addressing these concerns.37 The poll's findings reported at the conference appeared to make the case for at least some of the tort "reforms" Aetna has long promoted. According to the report, many judges indicated they believe that discovery "abuse" accounts for most of the delays and excessive costs in litigation. Many also said they support the use of court-appointed experts, favor bifurcated trials (separating the issues of liability and damages), reject proposed limitations on the use of juries in complex cases, and find judicial education programs beneficial.38 The polls' findings did not go without question, however. The report of conference proceedings indicates that several participants questioned the validity of the polls' findings regarding discovery abuses, suggested that questions should have been framed differently, and/or cautioned that "perceptions" should not be equated with "objective fact."39
Even more illustrative of the concerns such programs raise is the fact that, at the time of the 1988 conference (April 8 and 9), Aetna was a principal defendant in class action tort litigation involving hundreds of thousands of women injured by the Dalkon Shield intrauterine contraceptive device (IUD). The suit against Aetna, Breland v. Aetna Casualty & Surety Co., originally filed in federal court in Minnesota, had been transferred to Judge Robert Merhige, Eastern District of Virginia, who was also handling the A.H. Robins' bankruptcy proceedings through which the latter's liability was being determined. Aetna's potential liability derived from its role as Robins' insurer and, it was alleged, from independent actions the company had taken involving the Dalkon Shield. Though Aetna's ultimate liability was unknown, it was potentially staggering. The court valued the final settlement in Breland, including cash payments, additional insurance and attorney's fees, at more than $400 million dollars.40 Given the nature and scope of the claims against Aetna, successful litigation against the company would have multiplied that recovery substantially.
Two months before the Yale conference, Aetna filed a proposed settlement with Judge Merhige in which, among other things, the company asked the court to certify the case as a mandatory class action, thereby preventing claimants from "opting out" of the final settlement. According to attorney-author Richard Sobol, who published an award-winning account of the Dalkon Shield litigation, "[s]ome one hundred attorneys representing women injured by the Dalkon Shield opposed mandatory class certification in Breland."41 Notwithstanding the pendency of Aetna's motion, Judge Merhige was a participant in the 1988 Yale conference, formally responding to remarks by George Priest on "Private Litigants and the Court Congestion Problem." Also participating in the conference was Professor Francis McGovern, an expert Judge Merhige appointed in 1986 to oversee the process of estimating injury claims against Robins. McGovern delivered remarks about "Resolving Mature Mass Tort Litigation," and specifically referred to the pending settlement proposals in the Dalkon Shield cases. Three days after the Yale conference, Judge Merhige issued an order granting Aetna's request for certification of a mandatory class. According to Sobol, until then "efforts to maintain a mandatory class action for compensatory damages in a personal injury case had been unanimously rejected by the federal courts."42 The effect of the order was to eliminate "the individual rights of almost two hundred thousand women to bring actions for compensatory damages against Aetna--."43 Judge Merhige approved the Breland settlement on July 26, 1988.
Aetna's participation at the 1990 conference was also extensive. Yale Law School Dean Guido Calabresi opened the proceedings by stating "I am truly grateful to Aetna and to George [Priest] for doing the legwork" to make the conference possible. Priest then complimented Aetna for financing the conference, adding that "the participation of Aetna is a premiere model of how a corporation in the heat of the battle can underwrite an academic conference in an unbiased way." His remarks prompted Federal district court Judge Jack Weinstein to retort, "I'm delighted that Aetna's interest in this conference is purely academic."44 In addition, Stephen Middlebrook, Aetna Senior Vice President and General Counsel, and Judyth Pendell, Aetna Assistant Vice President, Law and Public Affairs, each moderated a session. Eight other Aetna representatives also participated in the conference.45 Even assuming the Yale conferences are balanced, Aetna undoubtedly receives a valuable return on its investment. The conferences provide the insurance giant's representatives with the opportunity to get to know attending judges in an informal, friendly atmosphere. They also are able to test various liability-limiting ideas on a captive audience in a congenial atmosphere.
Aetna has also received criticism for its sponsorship of other judicial "education" efforts. In 1990, the Aetna Foundation awarded the State of Connecticut Judicial Department a $45,000 grant for judicial education in alternative dispute resolution.46 Although alternative dispute resolution is a procedural reform with many backers, Aetna's direct grant to the judiciary was criticized. Connecticut Trial Lawyers Association president William Gallagher outlined his organization's reasons for objecting in correspondence to Connecticut Supreme Court Chief Justice Ellen Peters. Gallagher wrote: "Aetna represents a special interest. Its $45,000 grant is perceived as a lobbying effort on its behalf and on behalf of the insurance industry. The Aetna is also the real party in interest in a great number of cases which may go through the proposed ADR system."47
Privately-sponsored judicial training programs, and particularly those available free of charge, may reflect an improper and biased effort to sway judicial opinion. The potential for such abuse is real and significant, thus counseling careful examination of those programs--their message, the messenger, and the motives underlying them.
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NOTES
* Nan Aron is Executive Director of Alliance for Justice, a national association of environmental, civil rights, and consumer public-interest legal organizations. Barbara Moulton is a member of the Alliance staff and Chris Owens is a consultant to it. The selection here is reprinted by permission from its 1993 study, Justice for Sale. (Alliance for Justice, 1601 Connecticut Ave., Suite 600, Washington, DC 20009, $15 per copy.)
Copyright© 1997 Antitrust Law& Economics Review, inc.