US Ag-Gags and 'Veggie Libel' Statutes

'Opening the Barnyard Door: Transparency and the Resurgence of Ag-Gag & Veggie Libel Laws' by Nicole Negowetti in (2015) 38(4) Seattle University Law Review comments

 Over the past several decades, as the agricultural system became increasingly industrialized and the steps from farm to plate multiplied, consumers became farther removed from the sources of their food. Until recently, most consumers in America were content to eat their processed, cheap, and filling foods without giving a second thought to how these foods were produced. The tides are changing. Increasingly, consumers are calling for more transparency in the food system. Repulsed by images of animal cruelty and shocked by unsavory food production practices, consumers want the food industry’s veil lifted and are demanding changes in food production. The booming success of restaurants such as Chipotle, “the food industry’s fastest-rising star,” which serves “naturally- raised” meats and is committed to sourcing “Food with Integrity,” is evidence of this consumer demand for higher quality food.

Undercover activists and outspoken food system critics can be credited with inciting this food revolution. The agricultural industry is waging war on two fronts in response — one aimed at the market and public opinion, and the other at the legislature. In response to falling earnings, evidence of consumer distrust of “large” companies, and consumer preferences for “natural” foods, “Big-Ag” is attempting to rebrand itself through campaigns which pull back the curtain on the reality of its food production. For example, Alliance for Ranchers and McDonald’s have launched transparency campaigns to “open the dialogue” between consumers and producers. On the other front, there are efforts to silence those exposing the truth behind the industrial food system and “seeking to raise legitimate questions about the safety of our nation’s food supply.” As consumers increasingly call for more information about where their food comes from and how it is produced, there has been a resurgence of “ag-gag” and “veggie libel” laws, which raise significant First Amendment concerns.

Since the 1990s, the agricultural industry has used various pieces of state-level legislation such as “farm protection” and “agriculture disparagement” laws to limit media. Farm protection, or “ag-gag,” laws are crafted to limit access to agriculture facilities, and specifically restrict the use of audio and video recording of working agriculture operations. Agriculture disparagement, or “veggie libel,” laws are designed to limit what media and individuals can say about agriculture products and production practices. Nine states have passed ag-gag laws and thirteen states have veggie libel statutes.

Dataphoria

'Big Data Legal Scholarship: Toward a Research Program and Practitioner's Guide' by Frank Fagan in Virginia Journal of Law and Technology (Forthcoming) ambitiously

seeks to take first steps toward developing a research program for big data legal scholarship by sketching its positive and normative components. The application of big data methods to the descriptive questions of law can generate broader consensus. This is because big data methods can provide greater comprehensiveness and less subjectivity than traditional approaches, and can diminish general disagreement over the categorization and theoretical development of law as a result. Positive application can increase the clarity of rules; uncover the relationship between judicial text and outcome; and comprehensively describe judicially-determined facts, the contents of legislation and regulation, or the contents of private agreements. Equipped with a normative framework, big data legal scholarship can lower the costs of judging, litigating, and administrating law; increase comparative justice and predictability; and support the advocacy of better rules and policies.

In addition to sketching theoretical foundations, this Essay seeks to take first steps toward developing the core components of successful praxis. Handling and analyzing big data can be cumbersome, though the newcomer can avoid common pitfalls with care. Accordingly, there exist best practices for preprocessing, converting, and analyzing the data. Current analytical techniques germane to law include algorithmic classification, topic modeling, and multinomial inverse regression.

First steps, by definition, are incomplete. The contours of big data legal scholarship and practice will undoubtedly shift over time to reflect new techniques and prevailing normative questions. This Essay merely aspires to generate a conversation about how big data can enhance our understanding of law — what it is, and what it should be.

Fagan comments

This Essay narrows its focus on the application of big data methods to legal scholarship. The goal is to develop a framework for, or at least take first steps toward, understanding how big data techniques can be used to address the positive and normative questions of conventional legal scholarship, i.e. what the law is and what the law should be. Thus, it is less concerned with evaluating whether big data techniques are particularly well-suited to legal scholarship as a question by itself, which is certainly relevant and central, and is more concerned with identifying potential avenues for application to conventional doctrinal scholarship. Along the way, the analysis considers the value of traversing those avenues from a normative law and economics point of view. In other words, can big data legal studies increase social welfare, generally, through a reduction in the social costs of lawyering and judging, or say, an increase in the awareness of socially undesirable rules (thereby placing pressure on their decline), or an increase in the use of socially desirable rules, and yet still others. ... The Essay is divided into two parts. Part one takes first steps toward establishing a way of thinking about big data legal scholarship. It begins by considering how big data methods can positively describe the law and identifies three types of study: of taxonomy, of realism, and of policy. First steps toward positive application are followed by first steps toward normative application. Three normative goals are identified: to clarify doctrine, to advocate comparative justice and predictability, and to advocate better rules. Part two aims to demystify the big data research process by providing a practitioner’s guide, which details the steps a newcomer can take to develop a big data legal study. The guide has two goals: to convince an interested legal scholar to consider carrying out big data study, and to facilitate broader dialog amongst those who study legal doctrine — regardless of whether they are interested in big data methods. By prying open the black box just a little, part two hopes to further the conversation about law — between big data legal scholars and their counterparts using other methods.

Fagan goes on to argue

As emphasized by Joshua Fischman, legal scholars should prioritize normative questions over positive assessments and allow substantive questions of policy to drive their choice of methods. Nonetheless, this essay leads with big data’s positive component in order to place its normative component in sharper relief. Priority is assigned for exposition. Broadly speaking, big data methods can be used to describe legal rules and legal theory. For example, Jonathan Macey and Joshua Mitts have applied big data methods to develop a taxonomy of corporate veil-piercing;  I have applied big data methods to develop a taxonomy corporate successor liability.  Daniel Young has applied big data methods to study Bruce Akerman’s constitutional moments;  Lea-Rachel Kosnik has applied big data methods to study Ronald Coases’ transaction costs.  What has scientifically emerged thus far, at least in terms of big data’s ability to describe legal rules, is essentially taxonomic. And in terms of its ability to describ e legal theory, big data provides just one more empirical method for falsification.

1. Taxonomic Studies

Taxonomic studies are important nonetheless, especially where there exists scholarly dispute over which categorical set of facts leads to judicial application of a particular doctrine, or where there exists ongoing variation in judicial rationale for the same. Both of these discrepancies were present when Macey and Mitts approached veil-piercing with big data methods. Their effort was directed toward resolving (i) a scholarly dispute whether veil-piercing doctrinal standards exhibit coherence, or whether those standards are “characterized by ambiguity, unpredictability, and even a seeming degree of randomness”;  and (ii) why judges appear to apply standards differently.  Either of these grounds present an intellectual opportunity for big data taxonomic studies. With respect to veil - piercing, the intellectual and doctrinal stakes were relatively high considering that Stephen Bainbridge called for the abolishment of the doctrine for its seeming lack of coherence and non-uniformity.  Through application of big data methods, Macey and Mitts were able to find coherence in the morass of 9,000 veil-piercing decisions and establish an authoritative taxonomy. The taxonomy draws its authority from the impressive fact that it parses 9,000 decisions, which were culled from a database of 2.5 million.  Size, for better or worse, has always been a hallmark of quality and thoroughness in doctrinal scholarship.  Big data methods can leverage that hallmark. The taxonomy also draws authority from its limited subjectivity. Taxonomies based upon hand-classification are inherently biased because an analyst must decide on a classification scheme. While classifications based upon biological characteristics, for example, are relatively straightforward and mildly contestable at worst (think six legs means insect; thus, a centipede is not an insect), classifications based upon legal characteristics are often messy and mildly contestable at best. As noted by Macey and Mitts, the messiness was particularly acute with veil-piercing doctrine:

Coding schemes — indeed, quantitative analysis more generally — necessarily reflect an imperfect approximation of the qualitative complexity of each case. But using mechanical coding to identify determinants of veil piercing is particularly imprecise because it places substantial discretion in the hands of human coders, whose application of judgment can vary between individuals and ev en from case to case by the same individual.

Heightened subjectivity can lead to differing classification results which limits the scope of academic consensus and places a downward pressure on producing a testable theory or taxonomy. This is because those that disagree with the initial classification results are more likely to reject a theory grounded in those results. And because the theory will have less appeal, the scholar will have less incentive to produce it and empirically test it (given that she values wide appeal of her scholarship of course). 

Big data methods, instead, offer classification techniques that severely limit the subjective bias of the analyst and thereby promote consensual advancement. Through a method known as topic modeling, the analyst can use an algorithm to evaluate a practically unlimited number of judicial decisions at once — without specifying qualitative classes or case characteristics ad hoc. The algorithm, from its point of view, performs aimless work. The analyst simply specifies the number of topics to be modeled, and the algorithm simply outputs that number of word lists. The analyst must then create classification categories based upon the contents of the individual lists. For example, the topic model used in Fagan (2015) returned four lengthy lists with one consisting of terms such as: “petition reorganization”, “legal interest”, “transfer purchase”, “liquidation distribution”, and “public auction”.  With the aid of that list, I was tasked to create a category (most cleanly related to bankruptcy).

Category creation requires a certain amount of subjectivity, but that amount is severely limited when compared to other methods — and in scientifically meaningful ways. Consider first, that categories are based upon algorithmically generated word lists that can be replicated by other researchers who use the same dataset.  Any dispute over category choice is therefore limited to subjective interpretation of the word list. Second, unlike traditional classification met hods, topic modeling considers the complete contents of a legal text with equivalent importance. Terms such as “under capitalization” are evaluated with the same systematic rigor as “hot air”. Any pattern or topical structure manifest in the word lists, therefore, is mechanically based upon the texts — irrespective of their contents. This type of frankness with textual data could, possibly, be sacrificed when the data are approached non-algorithmically and with a human touch. Entire topics, or at least subtle classification influences, might be missed or papered over as a result. Finally, topic modeling limits subjectivity through the use of substantially enlarged datasets. As the number of data increase, a more objective picture is more likely to emerge.  On balance then, big data topic modeling presents clear advancement in reducing subjectivity when compared with traditional hand-classification techniques. Combined with its even clearer advantage in comprehensiveness when an analyst mines a sufficient universe of legal texts, it holds immediate potential to generate taxonomies that yield broader acceptance.

2. Legal Realist Studies

In his book How Judges Think, Richard Posner notes wryly that if judges did nothing but apply clear rules of law, “[t ]hen judges would be well on the road to being superseded by digitized artificial intelligence programs.”  For their part, legalists claim that judges merely “apply rules made by legislatures or framers of the Constitution (or follow precedents, made by current or former judges, that are promptly changed if they prove maladapted to current conditions).”  Judges state those rules in their opinions and apply them without bias to sets of facts, which themselves are also determined without bias.  Realists, instead, claim that the judicial temperament matters. Judicially - made doctrines and decisions depend in part upon the judges' incentives, “which may in turn depend on the judges' cognition and psychology, on how persons are selected (including self-selected) to be judges, and on terms and conditions of judicial employment.”  Application and determination of rules and facts can, therefore, partly depend upon judges' “motivations, capacities, mode of selection, professional norms, and psychology.”  Current judicial practice does not involve explicitly stating any of these up front, and it very likely will remain this way for the foreseeable future. Thus, if judicial temperament matters in decision making, it must be measured indirectly. Big data analytics provide a powerful research platform for empirically testing the tenets of legal realism. Relying upon a form of regression analysis adapted for lengthy texts, empirical techniques now exist for untangling the (potentially) uneasy relationship between judicial texts and judicial outcomes. The analytical results are able to support the assertion that a given judicial rationale, even when made textually explicit, is not (or conversely, may be) driving a pattern of judicial decision making.

An imposing body of empirical literature supports the claim that judges pursue political objectives — just one of the judicial pursuits identified by legal realists.  Many of these studies rely on specific attributes of the judge such as age, race, jurisdiction, party of the appointing executive, etc.  Big data analytics, by way of contrast, can rely on the judicially - determined facts of the case to the extent those facts are captured by actual judicial word choice in the opinion texts. For example, Macey and Mitts found that whether a corporation was undercapitalized, an alter ego, a mere instrumentality; or whether its stock was held mostly by its owners; or whether it had failed to issue dividends or had rarely issued them at all, mattered little in judicial application of corporate veil-piercing doctrine — without looking at characteristics of individual judges or by hand-classifying cases categorically by fact pattern.  Their result might be interpreted a number of ways, but surely one interpretation involves that judges pay lip-service to those reasons and dispose of cases for other reasons. 

Not only can big data uncover the posturing of a particular rationale, it can additionally show that other rationales matter, particularly rationales grounded in judicial attributes. For example, judges with particular attributes may tend to hold for plaintiffs when there is commingling of assets by small-business defendants or where plaintiffs are public entities. A number of possibilities exist across many areas of law. Areas where judicial bias is suspected already, e.g. criminal conviction and sentencing with respect to defendant attributes, free speech with respect to speech contents, various areas of administrative law, etc. are especially ripe for study.

Exactly how might this scholarship look? Big data legal scholars can use a method known as multinomial inverse regression (MNIR). Figure 6 depicts a spreadsheet of documents, ordered by rows, with the words contained within those documents ordered by columns.  Consider that each document represents a legal text associated with an outcome. For example, each document may represent a judicial opinion where a corporate successor is either found liable or not liable. Or each document may represent a judicial application of a criminal law doctrine where the defendant is found guilty or not guilty. All of the words in a given opinion are assumed to potentially relate to the judicial outcome. The analyst determines a relationship between the words and outcome by regressing the words as independent variables against the dependent variable of outcome.  The results are then interpreted to support or disprove a given theory. The key difference between MNIR and traditional regression is the sheer number of covariates. A data set consisting of a 20,000-word vocabulary will consist of 20,000 covariates. Obviously, judges' use of some of those words will contain no underlying theoretical connection to judicial outcome.  But word choice, just as obviously, is not meaningless. Otherwise judges could author opinions with randomly chosen words.

MNIR can go a long way toward addressing omitted variables bias when studying the relationship between text and outcome. Because the analyst narrows her inquiry to how a judicial outcome is reached only through judicial word choice, and because every word contained within a judicial opinion is counted as a variable, omitted variables bias is severely reduced.   So long as the inquiry is properly narrowed and explicitly acknowledged while reaching conclusions, big data methods can provide an effective and powerful research platform for advancing our understanding of the limits and scope of legalism and realism, at least with respect to the relationship between judicial text and judicial out come.

In addition to narrow inquiries that focus on text, big data methods can support wider inquiries into judicial behavior. When the words of the opinion texts are used as covariates, they can function as surrogates for the judicially determined facts of a case. One can think of the words as an enormous set of dummy variables, which can be used for holding the facts constant. This technique could represent an important advance in reducing subjectivity from traditional hand-coding of cases as explained above in the section on taxonomy.  Once the facts are controlled for, the remaining judicial attribute covariates such as age, appointed party, etc. can be evaluated more accurately.

3. Policy Studies

To appreciate the role of multinomial inverse regression as a tool for the big data legal analyst, consider the recent history of one of the most influential forms of empirical legal scholarship, viz., econometrics applied to legal questions (aka empirical law and economics). In their survey of the field, Jonah Gelbach and Jonathan Klick note immediately that “the central problem in much empirical work is omitted variables bias.” Before the mid-1990s empirical law and economics simply added more variables to address the problem. However, if the variables are unknown, then they cannot be added. A follow-up approach was to admit bias, but speculate about its nature.  However, the results of this approach were , naturally, always contestable because bias was always admitted. By the mid-1990s, empirical law and economics began implementing the difference-in-differences approach to address research design problems.

Typically, the analyst studies the effects of a new policy by comparing a jurisdiction that adopts the policy with a jurisdiction that does not. So long as unknown variables are realistically assumed to be the same across those jurisdictions, any difference between the two can be understood as caused by the change in policy. However, jurisdictions do not adopt policies randomly. Something is happening within the jurisdiction that is driving the choice to adopt. This “something” may or may not be happening in the other jurisdictions which are used for comparison. For this reason, state-of-the-art studies use instrumental variables (IV) and similar techniques to purge the jurisdictionally - centered (or more generally, the endogenous or internal) nature of policy choice. Nonetheless, a valid instrumental variable requires an assumption that cannot be tested. Its validity can only be evaluated for reasonableness. Thus, Gelbach and Klick conclude that “[u]ltimately, it is an unavoidable if uncomfortable fact of empirical life that untestable assumptions, and untestably good judgment about them, are indispensable to the measurement of causal effects of real-world policies.” However, the good news is that new empirical techniques like instrumental variables have contributed to the restoration of some consensual level of credibility to empirical law and economics.  The new methods are not perfect, but they “have uncovered compelling evidence on [issues] of great policy import.”

Difference-in-differences research designs augmented with quasi-experimental approaches such as IV are usually c oncerned with isolating a crucial effect of policy change. This effect often constitutes the policy's justification. For example, does increased policing reduce crime?  Do liberal takeover policies increase market value of firms? Do heightened pleading requirements increase settlement rates?  For some of these studies, especially those that involve the analysis of case law, controlling for judicially-determined facts may be useful. Big data methods can reduce subjectivity through classifying case types algorithmically with topic modeling or through using the words of opinion texts as covariates. In other instances, preliminary analysis with big data methods may reveal variation that can later be exploited with quasi-experimental methods

Comparative Product Liability Law

'The Product Liability System in China: Recent Changes and Prospects' by Kristie Thomas in (2014)63(3) International and Comparative Law Quarterly 755-775 comments

Following the enactment of the 2009 Tort Liability Law, the product liability system in China is largely complete. This article sketches the development of this system before outlining some of the main substantive provisions in force today and drawing comparisons between the Chinese approach and the US and European provisions. The Article will conclude that China’s product liability system provides an interesting case study which enriches the study of global trends and norms in the product liability arena. In line with many other countries, particularly in the Asia-Pacific region, the main influence on China has been the EC Directive rather than the US model. 

Thomas states

With the recent adoption of the 2009 Tort Liability Law (TLL) (in force from July 2010), it is timely to examine the development of the product liability regime in the People’s Republic of China (PRC). This paper seeks to outline the evolution of product liability in modern China from the initial introduction of a rudimentary set of tortious principles in the 1980s, to the more detailed provisions promulgated in the 1993 Product Quality Law and 1993 Consumer Rights and Interests Protection Law, and to the increasingly sophisticated Chinese consumers who are ever more willing to pursue their claims to court.

The evolution of the product liability system in China also needs to be set against a complex background of (over-)reliance on administrative remedies and multi-agency jurisdiction over defective products. Although these issues are not unique to China, they can also offer a useful perspective on the developing institutional capacity and regulatory norms in a country striving to move from a Socialist command economy to a modern economy driven by both exports and domestic demand. Both of these avenues for potential growth rely on product quality as a key factor and thus the development of a functional product liability system is crucial to secure the continued economic development of China in the future.

Further, examining the contemporary product liability system in China can illuminate aspects of the evolution of the wider Chinese legal system, such as the tensions between mediation and litigation as preferred methods of dispute resolution; the parallel tensions between civil liability and regulation via administrative means; and the emerging rule of law in China. Analysis of the Chinese product liability system can also contribute to existing debates on product liability on a global basis, including harmonization of product liability norms around the world, as well as the desirability (or otherwise) of such convergence; the increasingly blurred lines between the common law and civil law ‘families’ (and where East Asian legal systems fit into such a classification); and the twin dominance of the US model and systems based on the EC Directive as opposing models for developing product liability systems to emulate.

The TLL largely completed the formation of a modern product liability system which had been under construction for nearly 30 years. Although the TLL did not alter the pre-existing fundamental roots of the product liability system, it consolidated previous provisions on tortious liability, which were scattered throughout a range of laws, regulations and judicial interpretations, into an inclusive law with 12 chapters and a total of 92 Articles. In particular, the TLL increased the civil remedies available to consumers by introducing punitive damages, only previously available for certain product classes/categories, as well as mandating a universal warning and product recall system. Thus, the second part of this article will cover the background of product liability in China which culminated in the 2009 TLL and essentially aims to detail how and why the product liability regime developed as it did. This section will also contain some comments about how the Chinese experience compares to the development of product liability regimes in other jurisdictions, focusing on the US and Europe.

Next, the third part will discuss some of the most significant substantive provisions of the product liability system in China and draw comparisons with other product liability regimes around the world, in order to evaluate the Chinese system more systematically. In particular, reference will be made to the US product liability system post-Third Restatement3 and to countries adopting the 1985 EC Directive on Liability for Defective Products,4 in order to highlight to what extent the Chinese product liability regime is converging or diverging away from product liability norms in other jurisdictions. This section will focus on certain key elements of the product liability system, including: where the relevant rules can be found; whether the basis of liability is strict or based on fault; the remedies available including the potential availability or otherwise of punitive damages; and the mechanisms available for enforcement either by individual consumers or consumer bodies. The final section will draw these observations together to discuss what the Chinese product liability system can tell us more broadly about the general development of the Chinese legal system, the implications for product liability norms globally, as well as considering any enduring practical and political barriers to the operation of an effective product liability system in China.

Fiduciaries, Accountability and Innovation

'Regulating Secrecy' by W Nicholson Price in (2015) Washington Law Review (forthcoming) comments -

Regulation interacts with intellectual-property exclusivity in socially problematic ways by encouraging secrecy at the expense of innovation, efficiency, and competition. In the extensive scholarship on intellectual property and innovation, the role of regulation has gone largely unexplored. This Article is the first to theorize how regulation empowers intellectual property generally, to explain why this strengthening is problematic for trade secrecy but not for patents, and to offer the solution of regulator-enforced disclosure.

When a regulator defines a product or a process, it becomes much harder to invent around that product or process. Any associated intellectual-property exclusivity thus gets much more powerful. When the FDA approves a new drug, patents covering that chemical become much costlier to invent around because similar but non-identical chemicals lack the tremendous benefit of FDA approval. This patent/regulation interaction, however, can be noted and explicitly addressed by policy, as in the case of the Hatch-Waxman Act, which facilitates generic drug entry once drug patents expire. Regulation strengthens trade secrecy too, but more problematically. Biologics, which comprise the most innovative and expensive drugs today, are the path-dependent result of complex, secret manufacturing processes. Meeting the FDA’s definition of a biologic requires reverse-engineering its complex, secret process, making trade secrecy much more valuable and stifling competition and innovation. In such situations, regulation can push firms to choose secrecy over patents in precisely those socially important industries, like drugs, medical devices, and pesticides, where disclosure is most important.

Where regulation creates problems, however, it also offers the hope of a solution. Regulators are in a strong position to require disclosure directly: regulated firms have strong incentives for candor, regulators have the necessary expertise, and regulatory incentives can offset the costs of disclosure. More effective regulator-mediated disclosure would increase oversight and enable cumulative innovation, while retaining incentives for invention in regulated industries.

'Why Privacy and Accountability Trump Security' by Adam D. Moore comments

In this paper I will argue that establishing and maintaining practices promoting privacy and accountability will typically trump security concerns. While it is true that in specific instances security may outweigh privacy, this is not true once we glance upward to the level of practices. Along the way I will present and critique four prominent pro-security arguments entitled: “Just Trust Us,” “Nothing to Hide,” “the Consent Argument,” and “Security Trumps.”

Moore argues

Imagine you live in a world where each individual is responsible for his or her own security. This world is full of risks, from thieves, thugs, and extortionists to grifters, Ponzi-scheme artists, and hustlers. Also, imagine that you are not very good at providing security for yourself and decide to outsource this important task. Surveying the possibilities, you find that by moving to different areas, there are several distinct options.

In the Thomas Hobbes security zone, individuals are monitored around the clock without regard to privacy, liberty, or property. Total transparency and access yield nearly complete security. Using facial-recognition technology, virtual frisking, big data and predictive analytics, and video recorders, along with a host of other known and secret technologies, each individual is monitored and recorded around the clock. The chief security officer, known as Mr. Leviathan, is virtually unaccountable for how he conducts his business and is not subject to the sorts of intrusions common to typical Thomas Hobbes policy holders. Moreover, Mr. Leviathan is more or less free to pick fights with other security providers in other zones, upgrade surveillance equipment, and militarize his security forces at the expense of policy holders.

John Locke Inc., the primary competitor to Thomas Hobbes, falls at the other extreme. In the John Locke zone, security is promoted by protecting individual rights to life, liberty, property, and privacy. With a known and written law, recourse to impartial judges, and robust accountability provisions, basic rights are set aside only in rare cases. When rights are set aside, automatic and public review processes inform everyone of the reasons for some action or policy. Moreover, security officers are not free to start fights with other security agencies and are subject to the same sorts of rights and penalties as other John Locke policy holders.

While fictional, there are some interesting lessons to be learned by engaging in this sort of thought experiment. If you had to pick between these security agencies, which one would you choose and why? Arguably, if these were the only two choices, the obvious winner is the John Locke agency. There are lots of reasons. The most compelling, in my view, is that the Thomas Hobbes agency itself becomes a security threat. Without robust accountability, it would be hard to maintain that giving this sort of power to some company or government promotes, rather than undermines, individual security. Criminals, terrorists, or grifters are nowhere near as dangerous as Thomas Hobbes style governments. There are too many examples for us to deny Lord Acton’s dictum that “power tends to corrupt, and absolute power corrupts absolutely.”   If information control yields power and total information awareness radically expands that power, then we have good reason to pause before trading privacy for security.

Also note how security is tied to accountability and to the overall legitimate functions of an agency or state. Simply put, the more a state does for us, the more power it will likely need to complete its tasks. Standing against this increase in power will be the accountability provisions necessary to protect security. Giving a security provider a big gun with no or few accountability protections will debase security.

But this is exactly what we have been doing in the United States for decades. Consider the National Security Agency’s current bulk collection of data under PRISM, which would have remained secret had it not been for the whistleblowing of Edward Snowden.  Or consider abandoned programs such as the Terrorist Information and Prevention System (TIPS) and Total Information Awareness (TIA), which were attempts by the US government to circumvent Fourth Amendment privacy protections. Proposed new legislation, such as the Cyber Information Sharing and Protection Act (CISPA), would expand both surveillance authority and secrecy for our government agencies.

In response to these concerns, security officials typically offer one of four different arguments. According to the “just trust us” argument, we should let those in power decide the correct balance between privacy, accountability, and security. A second view minimizes privacy interests by calling into doubt the activities privacy may shield. This view, called “nothing to hide,” maintains that individuals should not worry about being monitored. Only those who are engaged in immoral and illegal activity should worry about government surveillance. A third strand, similar to the “nothing to hide” argument, is the view that “security trumps.” This latter account holds that security interests are, by their nature, weightier than privacy claims. Security is about life, limb, and property, and these interests will nearly always trump privacy or accountability concerns. Ken Himma, in this volume, defends a “security trumps” position. The final argument centers on consent. Many individuals voluntarily offer information, even private information, on social media sites, email, web pages, blogs, smartphones, and the like. By engaging in these activities, we are consenting that others may watch. The “consent” argument maintains that citizens have agreed to be monitored.

After presenting each of these arguments in more detail, an analysis and critique will be offered. While perhaps compelling at first glance, each of these arguments has serious flaws and should be rejected. The reason privacy and accountability trump security is because without the appropriate balance between these three important values, there can be no robust security.

'Information Fiduciaries and the First Amendment', a draft UC Davis Law Journal article by Jack Balkin, develops the theory of information fiduciaries.

Balkin explains

This article introduces the concept of an information fiduciary to explain how many different kinds of privacy protections can be consistent with the First Amendment.

An information fiduciary is someone who, because of their relationship with another, assumes special duties with respect to the information they obtain in the course of the relationship. Traditional information fiduciaries include professionals with special skills like doctors and lawyers. Clients cannot easily observe and monitor what professionals do and are dependent on professional expertise; moreover, professionals expect and encourage clients to have confidence in them. Lacking knowledge, skill, and the ability to monitor, clients must trust that these fiduciaries will not abuse their position and misuse the information they obtain from their clients.

For similar reasons, many online service providers and cloud companies should be considered as information fiduciaries with respect to their customers, clients, and end users. They keep their operations secret and they encourage end-users to trust them; moreover, end-users do not understand and cannot monitor how their information will be used in the future.

The duties of this new class of digital information fiduciaries may differ from and be more limited than those of traditional fiduciaries. Permissible regulations depend on the nature of their businesses and the kinds of trust and confidence they encourage from their end-users and clients. Governments may impose privacy regulations to enforce these fiduciary obligations without violating the First Amendment.

Similar reasoning explains how courts should modify the third-party doctrine in Fourth Amendment law. People should have a reasonable expectation that those who owe them fiduciary duties of trust and confidence will not betray them to third-parties, including the government. If new digital online service providers are information fiduciaries, end-users should have reasonable expectations of privacy in at least some of the information shared with them. Hence governments must show probable cause and/or obtain a warrant to access this information. The same reasons that governments may protect personal information under the First Amendment also provide justifications for a reasonable expectation of privacy under the Fourth Amendment.

Anxieties

'The History of Technological Anxiety and the Future of Economic Growth: Is This Time Different?' by Joel Mokyr, Chris Vickers, and Nicolas L. Ziebarth in (2015) 29(3) Journal of Economic Perspectives 31-50 comments 

Technology is widely considered the main source of economic progress, but it has also generated cultural anxiety throughout history. From generation to generation, literature has often portrayed technology as alien, incomprehensible, increasingly powerful and threatening, and possibly uncontrollable (Ellul 1967; Winner 1977). The myth of Prometheus is nothing if not a cautionary tale of these uncontrollable effects of technology. In Civilization and its Discontents, Sigmund Freud (1930 [1961], pp. 38–39) assessed what technology has done to homo sapiens, making him into a kind of God with artificial limbs, “a prosthetic God. When he puts on all his auxiliary organs he is truly magnificent; but those organs have not grown onto him and they still give him much trouble at times.”

So it is surely not without precedent that the developed world is now suffering from another bout of such angst. In fact, these worries about technological change have often appeared at times of flagging economic growth. For example, the Great Depression brought the first models of secular stagnation in Alvin Hansen’s 1938 book Full Recovery or Stagnation? Hansen drew on the macro economic ideas of John Maynard Keynes in fearing that economic growth was over, with population growth and technological innovation exhausted. Keynes was also drawn into the debate and offered a meditation on the future of technology and unemployment in his well-known essay, “Economic Possibilities for our Grandchildren".

This was originally written as a set of lectures in 1928 after a decade of dismal economic performance in the United Kingdom and then revised in 1930 to incorporate remarks about the Great Depression (Pecchi and Piga 2008, p. 2). Keynes (1930) remained optimistic about the future in the face of staggering unemployment, writing: “We are suffering, not from the rheumatics of old age, but from the growing-pains of over-rapid changes, from the painfulness of readjustment between one economic period and another. The increase of technical efficiency has been taking place faster than we can deal with the problem of labour absorption; the improvement in the standard of life has been a little too quick.” More recently, Winner’s (1977)  Autonomous Technology: Technics-out-of-Control as a Theme in Political Thought was published during the economic doldrums of the mid and late 1970s. Today, distinguished economists such as Lawrence Summers (2014), in a speech to the National Association of Business Economists, can be heard publicly musing about the possibility of secular stagnation. In his Martin Feldstein lecture, Summers (2013b) discussed a downright “neo-Luddite” (that famous protest movement against technological innovation in nineteenth century England) position on the effects of technology for long-term trends in employment.

Anxieties over technology can take on several forms, and we focus on what we view as three of the most prominent concerns. The first two worries are based on an “optimistic” view that technology will continue to grow and perhaps accelerate. First, one of the most common concerns is that technological progress will cause widespread substitution of machines for labor, which in turn could lead to technological unemployment and a further increase in inequality in the short run, even if the long-run effects are beneficial. Second, there has been anxiety over the moral implications of technological process for human welfare, broadly defined. In the case of the Industrial Revolution, the worry was about the dehumanizing effects of work, particularly the routinized nature of factory labor. In modern times, perhaps the greater fear is a world like that in Kurt Vonnegut’s 1952 novel Player Piano, where the elimination of work itself is the source of dehumanization (for example, Rifkin 1995). As Summers said (as quoted “not perfectly verbatim” in Kaminska 2014), while “[t]he premise of essentially all economics . . . is that leisure is good and work is bad. . . . economics is going to have to find a way to recognize the fundamental human satisfactions that come from making a contribution . . .” A third concern cuts in the opposite direction, suggesting that the epoch of major technological progress is behind us. In recent years, even in the face of seemingly dizzying changes in information technology, pessimists such as Gordon (2012), Vijg (2011), and Cowen (2010) have argued that our greatest worry should be economic and productivity growth that will be too slow because of, for example, insufficient technological progress in the face of “headwinds” facing western economies. Some of these so-called “headwinds,” including slow productivity and population growth, formed the basis of Hansen’s (1939) secular stagnation hypothesis. The argument of this paper is that these worries are not new to the modern era and that understanding the history provides perspective on whether this time is truly different. The next section of the paper considers the role of these three anxieties among economists, primarily focusing on the historical period from the late 18th to the early 20th century, while the final section offers some comparisons between the historical and current manifestations of these three concerns.

Corporate Personhood

'In Defense of Corporate Persons' by Kent Greenfield in (2015) 30 Constitutional Commentary 309 comments 

This essay is a critique of this attack on corporate personhood. It explains that the corporate separateness - corporate “personhood” - is an important legal principle as a matter of corporate law. What’s more, as a matter of constitutional law, corporate “personhood” deserves a more nuanced analysis than has been typically offered in arguing in favor of an amendment to overturn Citizens United. Indeed, the concept of corporate “personhood” can in fact be marshaled in arguments against corporations being able to assert constitutional rights. In the nascent category of cases brought by corporations asserting rights of religious freedom, for example, corporations typically derivatively assert the religious claims of their shareholders. Attention to corporate “personhood” would lead courts to separate the claims of shareholders from those of the corporation itself, leading to a dismissal of corporate religious claims asserted on behalf of shareholders.

Finally, it proposes that the concerns motivating the movement against corporate personhood should be ameliorated with adjustments in corporate governance rather than constitutional law. In corporate law, what we need are changes in corporate governance to make corporations more like persons, not less. Unlike persons, corporations are expected to act if they have only one goal - the production of shareholder value. People must balance a range of obligations, both moral and legal. Requiring corporations to attend to a broader range of stakeholders would make corporations more like people, would make them better citizens, and would make their political participation less problematic.

Greenfield suggests that

corporations should be seen as having robust social and public obligations that cannot be encapsulated in share prices. Now, executives have legal obligations to take account of shareholder interests. Progressive corporate scholars argue these “fiduciary duties”should be extended to employees and other corporate stakeholders.

One way to make these obligations operational is to make the decisionmaking structure of the company itself more pluralistic. In a number of European countries, for example, companies have “codetermined” board structures that require representation of both shareholders and employees.Even with these management structures, corporations continue their focus on building wealth—that is the core purpose of the corporate form—but not only for a narrow sliver of equity investors. And it works. Germany, where co-determination is strongest, is the economic powerhouse of Europe. The CEO of the German company Siemens argues that codetermination is a “comparative advantage”for Germany; the senior managing director of the U.S. investment firm Blackstone Group had said that codetermination was one of the factors that allowed Germany to avoid the worst of the financial crisis.

Notice that these governance structures reforms make corporations more like persons, not less. Human beings routinely balance a multitude of interests—I am, for example, a parent, a spouse, a teacher, a writer. Only the rare oddball behaves as if accumulating money is the paramount and unitary good. Humans have consciences; corporations do not. Left to themselves, they will behave as if profit is the only thing that matters. The best way to constrain corporations is to require them to sign onto a more robust social contract and to govern themselves more pluralistically—mechanisms designed to mimic the traits of human personhood within the corporate form.

If corporations had these traits of personhood, I would worry less about corporate involvement in the political arena. American corporations have become a vehicle for the voices and interests of a small managerial and financial elite. The cure for this is more democracy within businesses—more participation in corporate governance by workers, communities, shareholders, and consumers. If corporations were more democratic, their participation in the nation’s political debate would be of little concern.

Unfortunately, corporate personhood opponents are making these corporate governance reforms less likely. Personhood skeptics often characterize corporations as having a narrow social role; because of that narrow role, the argument goes, they owe it to shareholders to stay out of politics. The opponents of Citizens Unitedare endorsing a narrow view of business as a way to explain why corporations should be exiled from the public square. To fight corporate personhood, they are bolstering shareholder primacy.

Take for instance Justice John Paul Stevens’s dissent in Citizens United itself. He argued, among other things, that corporate speech should be limited in order to protect shareholders’investments. Shareholders are seen as owners, as “those who pay for an electioneering communication” and are assumed to have “invested in the business corporation for purely economic reasons.” Stevens argued that corporate political speech did not merit protection because:

[T]he structure of a business corporation . . . draws a line between the corporation’s economic interests and the political preferences of the individuals associated with the corporation; the corporation must engage the electoral process with the aim to enhance the profitability of the company, no matter how persuasive the arguments for a broader . . . set of priorities.

Even more revealing, Stevens cites as support a set of corporate governance principles adopted by the prestigious American Law Institute. The Principles were the product of compromise, both asking corporations to look after shareholder interests and allowing them to act with an eye toward “ethical”and “humanitarian” purposes. But Stevens quoted only the language embodying shareholder primacy: “A corporation … a view to enhancing corporate profit and shareholder gain.”

Opponents of corporate personhood are following Stevens into the shareholder rights trap. Common Cause now has a “featured campaign” for “strengtheningshareholder rights.” The Brennan Center for Justice is supporting a “shareholder protection act”and calls shareholders “the actual owners”of corporations. Professor Jamie Raskin of American University, one of the smartest and most energetic academic opponents of Citizens United, says that corporations should not be spending in elections because, “after all, it’s [shareholders’] money.” This is all shareholder primacy language brought to bear in fighting Citizens United.

Wall Street loves talk of shareholder rights. To be sure, many Americans are shareholders through our retirement accounts and the like. But “widows and orphans” are still the minority; most stock held in American businesses is owned by the very wealthy. (The richest 5% of Americans ownover 2/3 of all stock assets. The bottom 40%—125 million working class people —essentially own nothing in terms of stock.) So when opponents of Citizens United focus on shareholder rights, they are singing Wall Street’s tune.

I wish this shareholder-protective rhetoric was just that, but it is not. Corporate personhood opponents urge, as an intermediate measure short of a constitutional amendment, that corporations be required to seek shareholder approval before spending corporate money on political campaigns. There might be some benefit to such a rule, since it would help ensure executives do not spend corporate monies on issues and candidates opposing company interests. But that benefit is probably marginal, and would come at the risk of validating corporate involvement in the political process in furtherance of shareholder value and to the detriment of other stakeholders. Corporations could speak out in favor of Wall Street but not employees? That would be worse, not better.

The efforts of anti-personhood activists are not only in tension with stakeholder theory on the conceptual level. In the political arena, too, a tension exists because the energy for reform is a finite resource. I believe that, in this moment, there is an opening to question the very framework of how we view corporations and their social obligations. But we won’t get anywhere on that front if the progressive left wastes its energy fighting for a constitutional amendment that is unlikely to succeed and would either be toothless or affirmatively harmful if it did

Data Protection Economics

'The Economic Impact of the European Reform of Data Protection' by Stephane Ciriani in (2015) 97 Communications and Strategies 41-58 comments

The economic value of personal data is mainly extracted through online intermediation services and big data analytics. The largest providers of these services are US OTTs. These are global market players with a leading position in the European market. As a result, the personal data of European users are widely processed by these providers. The EU and the US have different approaches to personal data protection and data privacy. In the US, privacy is a property right whereas in the EU, it is a fundamental right, which must be provided by the government. The European Commission has proposed a reform of personal data protection, the General Data Protection Regulation (GDPR), aiming to ensure that European consumers are protected according to European law whenever their data are processed outside the EU by foreign companies. According to the European Commission, the reform will bring economy-wide benefits to the EU. However, several studies on the economic impact of the reform have led to opposing conclusions. They claim that the extraterritorial application of the European law will impose a regulatory cost burden on US providers. This burden would hurt transatlantic trade in services, and would be detrimental to the European economy.

Our analysis shows that the GDPR is not a protectionist policy. The extraterritorial application of the European law will neither hinder competition nor disrupt cross-border data flows. On the contrary, the extension of European law to the US OTTs that target European consumers will contribute to establishing a level playing field between European providers and their US competitors in the European market. Both EU and US providers would obey European laws when processing European consumers' personal data. Nevertheless, the literature examined provides no evidence that reinforced standards of protection would foster the competitiveness of European services in world markets. Moreover, studies also suggest that the costs of applying the GDPR in the EU might outweigh the efficiency gains. In conclusion, the optimal trade-off between incentives to provide innovative services and the obligation to protect privacy as a fundamental right has yet to be achieved by the European regulation.

Rather than increase administrative burden, an efficient data protection policy should base European users' protection on modernised, more dynamic principles, supporting the capability of European industry to compete and innovate on fair and efficient grounds for the benefit of European users and of the European economy.