Keep it Simple, Solons

Michael McMenamin from the November 1995 issue

(Page 2 of 2)

Just compensation and bilateral monopolies are the keys here. There are bound to be many occasions where two parties have conflicting interests and a court is going to have to resolve them by balancing the competing interests, like divorce. By consent of both or at the choice of either? Epstein says neither and proposes "a system where the divorce takes place as of right, upon payment of just compensation for the releasealimony and support."

The sixth rule is directed at compensation for the harmful effects of government regulation:

"The current law fails to limit the use of government regulation under the principle of take and pay. A new start is needed, one that does not have as its mission preserving from constitutional attack as much of the regulatory state as possible....[T]he ONLY correct position is to recognize that ALL forms of regulation are subject to scrutiny under the takings clause. By design this position is meant to subject every form of government restriction to constitutional scrutiny....Any form of regulation thus requires compensation in cash for the losses inflicted (1) unless the regulation is necessary to prevent the kinds of losses that neighbors could enjoin under ordinary tort law principles...or (2) unless some compensation in kind is furnished to the party whose property is taken."

In the second half of his book, Epstein applies these simple rules to employment law, compul sory collective bargaining, employment discrimination, affirmative action (all taken care of by rules one and three), product liability, securities law, insider trading (rules three and four), and environ mental protection (rules two, four, and six).

I won't go into detail on all of the practical applications of his rules, but their overall impact in all the areas listed above would be to reduce litigation. Reduce, but not eliminate. Other areas would probably see more litigation: defamation suits against the media, for example, where truth would be the only defense, not to mention the many suits against all levels of government whose regulations had diminished the value of private property.

The book would have its greatest immediate impact if legislatures would heed the lessons of the simple rules. From Epstein's first principle of government action, "Do no direct harm," to the rules themselves, performing a "Simple-Rules Analysis" (or an "Epstein Analysis") on proposed legislation should be the initial reaction of any thoughtful legislator contemplating a new law herself or confronted with a colleague's proposal.

As for regulatory liberals, they better hope that Newt Gingrich is too busy with his book tour or writing the sequel to his novel and Dick Armey too distracted with the burdens of replacing the tax code to read this book. A simple-rules analysis works just as well on existing legislation as on pro posed.

The book's possible impact on the judiciary would not be as direct or immediate. Despite the activism of some judges, the judiciary is essentially passive in a way legislatures are not: Judges can only decide cases which come before them. They can't wake up in the morning and decide to change the law unless they happen to have a pending case that permits them to do so. Even then, they are subject to review by appellate courts. Moreover, unless they can find constitutional grounds to do so, they have to enforce the laws legislatures have passedill-conceived or not. Nevertheless, in the right case in the hands of a good lawyer, a simple-rules analysis will be a powerful weapon.

Epstein does not pretend that his simple rules address all of the legal issues confronting society, including those involving health care, church and state, education, and the military. The book fea tures "nothing, in short about many of the issues that dominate political discourse today," Epstein says. Nevertheless, like the five lawyers at the bottom of the sea on the first page of Epstein's book, it's a good start.

But don't worry about us lawyers. It's still a complex world out there and you're still going to need us to apply these simple rules on your behalf the next time you're in a jam, for example if one of your competitors hires away your best employee despite a non-compete clause she signed. Or your neighbor decides that a backyard smelter won't really harm neighborhood values. Or your employer reneges on that bonus he promised, which lured you to move half way across the country.

Or a local judge sues your television station for libel for filming him at a bar when he should have been on the bench. Or the person you bought your new home from lied when you inquired about roof leaks. Or you're sued for an automobile accident which really wasn't your fault at all, not at all. We believe you. You've been wronged. You deserve justice. And after you've purchased our alle giance in the form of an appropriate retainer, we'll represent you. Just like we always have.

Oh, by the way: Epstein hopes his simple rules will reduce our ranks by some 40 percent to reach our optimum number. That means there will be greater demand for those of us still left in the profession. So you may notice an ever-so-slight upward adjustment in our normal, customary, and ever-so-reasonable fees. See rules one and three.