Screenshot 2020-03-26 at 12.15.15

No matter how old, frail or vulnerable it may be, a life isn’t something to take or risk at another’s discretion. Nor does it undermine culpability when someone dies as a result of negligence. The common law ‘eggshell skull’ rule reflects this moral principle.

During the Coronavirus pandemic, some erstwhile defenders of the famous Non-Aggression Principle (NAP) appear to have forgotten that natural rights are conceived to protect life as well as liberty and property. They seem to think that the liberties we ordinarily enjoy have priority over the right to life of others. The environment has changed and, for the time being, many activities that we previously knew to be safe for others are not. They are not part of our set of liberties until a reformed set of rules, norms and habits establishes a sufficiently hygienic public environment. To say that bans on public gatherings violate natural rights a priori is as untenable as G.A. Cohen’s claim that a prohibition on walking onto a train without a valid ticket is a violation of one’s freedom.

The clue for anarcho-capitalist state-sceptics that this is a genuine shift in social priorities is that even organized criminal gangs are willing to enforce social distancing. You do not have to believe that the state itself is legitimate to see that the need for social distancing is sufficiently morally compelling that it can be enforced absent free agreement, just as one does not need free agreement to exercise a right to self-defense.

Not every restriction is going to be justified, although erring on the restrictive side makes sense while uncertainty about the spread of infection persists. Ultimately, restrictions have to balance genuine costs with plausible benefits. But rejecting restrictions on a priori grounds does not cohere with libertarian principles. Right now, our absolute liberties extend to the right to be alone. Everything else must be negotiated under uncertainty. Someone else’s life, even two-weeks or so in the future, is a valid side-constraint on liberty. People can rightfully be made to stay at home if they are fortunate enough to have one. When people have to travel out of necessity, they can be temporarily exempted, compensated or offered an alternative reasonable means of satisfying their immediate needs.

Seattle’s landlord regs at the Supreme Court

Landlords in Seattle must rent to the first person to walk in the door, so long as they check out on paper. This “first-in-time” rule has slogged through several years of litigation over whether the rule violates landlords’ constitutional rights (full disclosure–I represent the plaintiffs). That case, called Yim v. City of Seattle, has now crescendoed with a petition to the United States Supreme Court. The Court should seize the chance to decide two pressing questions about the Constitution’s role in protecting property rights: (1) if regulation destroys a fundamental attribute of property ownership–like the right to exclude, or the right to sell–does the regulation result in a taking that requires compensation? and (2) if a regulation is “unduly oppressive” of individual rights, does it violate due process?

The first-in-time rule is something of a novelty. The rationale behind the rule is to prevent implicit bias; a landlord can’t unconsciously discriminate if she doesn’t have any discretion to decide whom to rent to. Hence, the rule allows landlords to set pre-established criteria, though all criteria must have minimum thresholds (i.e., minimum credit score). The landlord cannot thereafter deviate from that criteria and must simply rent to the first person who qualifies, even if ten or fifteen applicants check all the boxes. After the landlord rents to the first comer, the lucky winner has 48 hours to sit on the offer, after which time the offer moves on to the next person in line.

The bottom line is that landlords can no longer make common-sense judgment calls about who will live on their property. The practical challenges that result are daunting, for small landlords in particular. A landlord cannot, for instance, deny an applicant because they feel threatened or unsafe when an applicant tours a unit. That’s a big deal for plaintiff Kelly Lyles, a single woman and sexual assault survivor. Or for MariLyn Yim, who owns a triplex and lives in one of the units with her husband and kids. They share a yard and common spaces with their tenants–compatibility and safety are key. And some of the Yims’ units have roommates, where the ability to select people that will get along and feel comfortable with each other is essential. But basic discretion is out the window with first-in-time. If Lois Lane advertises the fortress of solitude for rent and Lex Luthor shows up with his spotless credit score and seven-digit income, she’s out of luck.

And renting property often involves a give-and-take negotiation that’s no longer possible under the rule. Tom Riddle’s credit score is shabby, but he offers a two-year lease instead of one to make his application more appealing. Not under first-in-time. Pam Isley offers to do landscaping if the landlord drops rent by $50 a month. Nope. Nor can landlords offer leniency by deviating from their criteria because they want to give a second chance to someone down-and-out.

MariLyn Yim and Kelly Lyles sued on the theory that removing everyday discretion in this manner constitutes an unconstitutional taking and a violation of due process. They won at trial and lost before the Washington Supreme Court. Now, the questions they bring to the Supreme Court’s attention raise some fundamental questions about the Fifth Amendment’s takings clause and the Fourteenth Amendment due process guarantee.

The plaintiffs argue that a taking occurs when regulation destroys a fundamental attribute of property ownership. They invoke a well-known metaphor in property law: the “bundle of sticks.” Property is not really a single right–it’s a bundle of various rights that a person has with respect to a physical thing, such as the right to exclude others, the right to use the property, to occupy it, to sell it, and so on. Plaintiff’s theory is that each of these “sticks” in the bundle is entitled to independent constitutional protection; when one of those sticks is destroyed by regulation, that constitutes a taking of property as surely as a seizure of land. In this case, plaintiffs argue that denying them the right to decide who will occupy their property destroys their right to sell property to the person of their choosing and their right to exclude people not of their choosing.

This is an important and uncertain question under the Fifth Amendment. The Supreme Court has held in the past that a taking occurred where various attributes of property ownership were destroyed. For instance, when the United States required a marina to open a private lagoon to the public, the Supreme Court held a taking occurred because the government had destroyed the right to exclude, “one of the most essential sticks in the bundle of rights that are commonly characterized as property.” Likewise, the Supreme Court held that a taking occurred when Congress prohibited owners of tribal lands to pass on the property to their heirs, which was a “total abrogation” of a right that “has been part of the Anglo-American legal system since feudal times.”

The trouble is, though, that some other decisions of the Supreme Court can be read to refute this approach to takings. Hence, the city of Seattle argues that these takings precedents don’t represent the current state of takings law. This question thus presents an important opportunity for the Court to clarify the scope and meaning of the Fifth Amendment.

The second issue is no less compelling: does the oppressive impact of a law bear on whether it satisfies due process? The federal courts tend to answer yes, while a large number of state courts answer no. The Fourteenth Amendment’s due process clause imposes, at minimum, a floor of rationality–a law must be rationally related to a legitimate government interest. The question raised in the Yim petition asks the Court to address whether an unduly oppressive means (obliterating discretion) of achieving a legitimate government purpose (preventing discrimination) satisfies this threshold of rationality. The Supreme Court has repeatedly held that a law’s oppressive nature bears on whether the law is arbitrary or irrational. That is, a government has no legitimate interest in imposing oppressive laws on its people, and the use of oppression to achieve an otherwise legitimate government interest is arbitrary and irrational, in violation of due process.

The Washington Supreme Court, however, held that the U.S. Supreme Court had implicitly overruled this “unduly oppressive” analysis. It also overruled a whopping 61 of its own cases recognizing and applying this “unduly oppressive” test–so many that it provided a separate index of cases fed through the shredder. By joining a growing number of states that refuse to recognize that an unduly oppressive law violates the rational basis test required by due process, the Washington Supreme Court has teed up an important issue that warrants the U.S. Supreme Court’s attention.

These questions will grow in significance as government control of the rental market expands. Since enacting first-in-time, for instance, Seattle has imposed a ban on criminal background checks, a ban on winter evictions, a requirement that landlords rent to a tenant’s choice of roommate, and more. Other cities are enacting similar restrictions on landlord control over their own property. The U.S. Supreme Court should address the pressing constitutional questions that such regulations raise.

Coronavirus and takings

City governments are flirting with a ban on evictions during the coronavirus pandemic. I doubt, however, that doing so comports with the Constitution’s takings clause or, perhaps, the contracts clause.

San Jose has introduced legislation that will ban evictions due to un/underemployment resulting from coronavirus. Seattle’s socialist firebrand, Kshama Sawant, calls for similar action. Her letter, though, betrays the truth behind many proposed emergency measures–she’s leveraging the crisis to further her political agenda, particularly her hatred of capitalism. In the letter, she froths: “The status quo under capitalism is deeply hostile to the majority of working people, and it would be unconscionable to place the further burden of the Coronavirus crisis on those who are already the most economically stressed.” Never mind that the status quo in the absence of capitalism would be grinding poverty.

But, in any case, the proposal to ban evictions and force landlords to renew leases as the pandemic sweeps across the states raises serious constitutional concerns. Even in times of crisis, observance of constitutional norms remains essential. In part, this is because laws passed as emergency measures tend to hang about long after the emergency subsides. New York rent control began as a wartime measure, for instance, and that curse still plagues the New York rental market. The other reason, of course, is that the Constitution is built for just these moments. The pressure to invade rights, after all, comes when things are not going well. As Justice Sutherland once put it, “If the provisions of the Constitution be not upheld when they pinch, as well as when they comfort, they may as well be abandoned.”

Forcing landlords to either renew leases or forego eviction for lease violations likely raises at least two constitutional problems: takings and impairment of contractual obligations. While such laws don’t literally seize property, they effectively impose a servitude on landlords’ property, stripping them of control over the disposition and occupation of their land. When an essential attribute of property ownership is destroyed by regulation in this manner, the government must offer compensation. We already know this compensation requirement applies during national emergencies. During World War II, for instance, the Supreme Court held that the United States had to compensate property owners and leaseholders when it temporarily seized factories for wartime production.

The contract clause problem is also straightforward: barring landlords from enforcing lease terms impairs obligations under pre-existing contracts. The contracts clause, though, has been severely undermined in recent decades, such that a showing of a compelling interest like mitigating the impact of the pandemic may well satisfy the flaccid demands of the modern contracts clause.

It may seem profoundly harsh to impose constitutional constraints on governments trying to resolve a crisis. But three things ought to be kept in mind.

First, an emergency certainly means that some will face a heavy burden, but that fact tells us nothing about how that burden should be allocated. Why should landlords bear the costs? Indeed, As the Supreme Court said in Armstrong v. United States, the takings clause exists to avoid imposing societal burdens on specific individuals: “The Fifth Amendment’s guarantee that private property shall not be taken for a public use without just compensation was designed to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.”

Second, we should keep in mind that lease agreements already account for risk. That’s baked into the price and terms that give rise to a mutually agreeable arrangement between parties. To simply allow one party to slip out of the terms of the lease distorts that arrangement.

Third, the takings clause does not bar emergency measures, including the seizure of property, but only upon just compensation. No exigency should excuse cities like San Jose or Seattle from compensating for the costs they’re hoisting upon landlords. And in the case of the contracts clause, the government could still honor existing leases by acting as a guarantor for tenants who can’t pay the rent.

All of these points apply to a world in which landlords do not voluntarily exercise leniency. But I think we’ll find that most landlords are forgiving during a temporary crisis. Most landlords have an extreme aversion to evicting tenants–it’s the nightmare, last-ditch option that they try hard to avoid. That, plus the simple dose of compassion that many landlords will feel inspired to offer, may do more toward helping see us through than any emergency measures.

Broken Incentives in Medical Innovation

I recently listened to Mark Zuckerberg interviewing Tyler Cowen and Patrick Collison concerning their thesis that the process of using scientific research to advance major development goals (e.g. extending the average human lifespan) has stagnated. It is a fascinating discussion that fundamentally questions the practice of scientific research as it is currently completed.

Their conversation also made me consider more deeply the incentives in my industry, medical R&D, that have shaped the practices that Cowen and Collison find so problematic. While there are many reasons for the difficulties in maintaining a breakneck pace of technological progress (“all the easy ideas are already done,” “the American education system fails badly on STEM,” etc), I think that there are structural causes that are major contributors to the great slowdown in medical progress. See my full discussion here!

Departments of Higher Education should have mystery shoppers

As you know, I teach at a SUNY campus. As you can imagine, the views I express here are only my own and certainly not those of any authority figure in the bureaucracy I live in or the higher ed industry more broadly. My union would be mortified.

In my opinion–coming from a limited perspective within the sausage factory–the problem we’re facing is that universities are good at education and bad at credentialing (at least when there’s a significant demand for the signal value of a degree). This has lead to a host of problems–Baumol disease, growing administrative expense, all sorts of cultural unsavoriness, declining standards, grade inflation, etc.

Education just happens. You can’t plan for it. You don’t do x amount of philosophy and then you’re enlightened. But a navel-gazing, consequence free environment with a culture of inquiry is a fine place for education to happen.

Credentialing on the other hand is a common pool with the usual problems. It doesn’t have to interrupt the educational component of the university, but when actors in this setting follow the basic economic logic of their situation enrollments (and budgets) expand and the nature of the good produced by schools shifts from unquantifiable to commodity.

In such a setting there is a strong case to be made for regulation. At the very least to manage the common pool resource of the signal value of a bachelor’s degree, but more ideally to ensure students aren’t simply learning to minimize cost while navigate a bureaucracy.

Of course, NOL readers know that regulation is never easy and comes with many problems of its own. In fact, many of the problems I see in the industry are the natural bureaucratic outcome of such regulation (particularly as I sit here avoiding the work I’ve got to do making my tenure packet more closely resemble a checklist version of the guidelines my campus gave me. God I hate this!). For a taste of how this mess is currently killing the goose that laid the golden eggs, check out BadAssessment.

How do we improve the regulatory quality? Mystery Shoppers!

My industry is disciplined through:
* direct state regulations,
* marginal nudges through strings-attached financing,
* “self”-regulation through quasi-public regional accreditation and much-less-public discipline-specific accreditation,
* direct consumer experience,
* U.S. News (and similar) rankings, and
* Peter Theil and other critics complaining about how the education system is broken.
My proposal could be done at any of these levels, but to my knowledge is only actually done at the statistically invalid level of direct consumer experience.

Governments could invent many students and their traits and send copies of these students to a sample of online programs. Teams would manage sets of students and gather data. With several of these students taking different paths through each school the agency could learn something useful about the school as a whole–is it a degree mill? How does the actual student experience compare to other schools? Are there pitfalls that might put vulnerable groups at a disadvantage?

Peter Theil could do it more aggressively and generate an upper-bound estimate on the bullshit in the industry.

The College Board or U.S. News would probably turn it into a new costly margin of competition between schools, but that’s probably an improvement over what we’ve got now.

To my knowledge, nobody is doing this. In my opinion, given the stakes and the size of the industry, it’s worth approaching this from many directions. Mystery shoppers would certainly be a more direct evaluation than the hundreds of pages of sacrificial paperwork we’re currently using.

More campaign-finance fiction

Today, Jacobin reports on Bernie Sanders’ proposal to give each American a $50-$200 voucher to spend on politicians’ political campaigns. I’m the lead counsel challenging a similar voucher program in Seattle, so I have some feelings on this subject.

The article opens with this classic ipse dixit: “Everyone knows that rich people skew our political priorities through big-money donations to candidates.” Really? I didn’t know that. But of course this is the big assumption behind so much campaign-finance hype, one that is vague and unprovable, like all good political rhetoric.

My first question here would be an attempt to resolve an ambiguity: what does “skew” mean? Where’s the magical baseline of “unskewed” political priorities? That baseline does not and never has existed. This opening line also fails to account for causation. That is, do donations influence eventual votes, or are both donations and votes attracted to candidate strength? I’ve yet to see a convincing argument that donations have ever “bought” a major federal election.

The article also seems to assume, as many do, that liberal politicians are the ones losing out in the big-donor world. This just isn’t so. Candidates from across the political spectrum receive plenty of cash. Heck, Hillary outspent Trump 3 to 1 in 2016. If she was hoping her donors would “buy” her the election, she was sorely disappointed.

The article also parrots the frequent refrain about our “broken” campaign-finance system. Again, compared to what? Where’s the unbroken system and what does it look like? At the end of the day, politicians need to figure out how to appeal to voters with all that money. How are our politics “skewed” if both parties are receiving plenty of funding with which to present a message that draws votes?

As for the actual voucher proposal, I think most Americans would rather keep their $50-$200 dollars and spend it on something other than a politician, but that’s just a hunch.

Ban on inquiries into wage history upheld

I haven’t read the decision in much depth yet, but the Third Circuit Court of Appeals this week upheld a Philadelphia ban on employer inquiries into job applicants’ wage history.

This is part of a troubling trend. More and more governments are banning inquiries into information that they don’t want people to use. Seattle and other cities have begun banning criminal background checks by landlords. Portland is set to pass a law that bans landlords from asking about a person’s immigration status. Other municipalities have passed and likely will pass more laws banning inquiries into wage history. The Third Circuit opinion will make it much harder to challenge this kind of speech restriction.

The Third Circuit decision held that the wage inquiry ban should be subject to the “commercial speech” test. In First Amendment jurisprudence, courts are more forgiving of restrictions on commercial speech than other types of speech. This doctrine, however, is meant to be reserved for advertisements, not any speech that happens to be related to a possible transaction. Here, the Third Circuit extended the rule to include questions asked in the context of an anticipated transaction–an employment contract. This is an unfortunate expansion of a doctrine that arguably shouldn’t exist at all. The First Amendment doesn’t distinguish between commercial and other types of speech, and neither should the courts.