Issue 2

Qualitative Market Definition

Modern antitrust law has come under intense criticism in recent years, with a bipartisan chorus of complaints about the power of technology and internet platforms such as Google, Amazon, Facebook, and Apple. A fundamental issue in these debates is how to define the “market” for the purposes of antitrust law. In the Supreme Court’s first antitrust case on platforms (2018’s Ohio v. American Express), the definition of the relevant market was the central issue. The Justices’ 5-4 split on the issue was particularly stark, with the dissent describing the majority’s approach as not only “wrong” but “economic nonsense.” Partially in response to the controversy in American Express, recent judicial, legislative, and regulatory proposals have even suggested doing away with market definition in some antitrust cases.

The root problem, this Article shows, is that modern market definition has been treated in antitrust as a matter of quantitative economics, with markets defined by economic formulas lacking a connection to widely held social understandings of competition. Antitrust law needs to augment these quantitative approaches by explicitly acknowledging qualitative aspects of markets, including the normative visions of competition they represent. Such an approach is hardly radical. Such qualitative factors have been part of market definition since its origin, and federal antitrust regulators have recently solicited public comment on whether to include qualitative factors in market definition. This Article argues that market definition is necessarily normative and describes an approach for including qualitative criteria in market definition so that market definition accurately reflects the types of competition antitrust law seeks to protect.

Introduction

Few aspects of antitrust are more central, and more controversial, than the role of market definition. Market definition plays a role in almost every antitrust case.1 1.Jonathan B. Baker, Market Definition: An Analytical Overview, 74 Antitrust L.J. 129, 129 (2007) (“Throughout the history of U.S. antitrust litigation, the outcome of more cases has surely turned on market definition than on any other substantive issue.”).Show More Market definition featured prominently in 2018’s Ohio v. American Express,2 2.Ohio v. Am. Express Co., 138 S. Ct. 2274, 2285–87 (2018).Show More the first case in which the Supreme Court addressed the question of how U.S. antitrust law should regulate “platforms.”3 3.In the economics literature, a “platform” or “two-sided” market is one in which “1) two sets of agents interact through an intermediary or platform, and 2) the decisions of each set of agents affects the outcomes of the other set of agents, typically through an externality.” Marc Rysman, The Economics of Two-Sided Markets, 23 J. Econ. Persps. 125, 125 (2009). Facebook offers a typical example. Facebook produces two products (social media services and advertising services) that are consumed by two distinct groups (social media “friends” and advertisers) and the value of at least one product (the advertising) increases with consumption of the other product (social media) by a different group (“friends”). See Thomas B. Nachbar, Platform Effects, 62 Jurimetrics 1, 8 (2021). These indirect network effects and the externalities they generate separate platforms from other businesses, which also bring together distinct groups of users. Mark Armstrong, Competition in Two-Sided Markets, 37 RAND J. Econ. 668, 673 (2006); David S. Evans, The Antitrust Economics of Multi-Sided Platform Markets, 20 Yale J. on Reg. 325, 332–33 (2003); Geoffrey G. Parker & Marshall W. Van Alstyne, Two-Sided Network Effects: A Theory of Information Product Design, 51 Mgmt. Sci. 1494, 1496, 1502 (2005). Platforms have been canonically described by Jean-Charles Rochet and Jean Tirole. See Jean-Charles Rochet & Jean Tirole, Platform Competition in Two-Sided Markets, 1 J. Eur. Econ. Ass’n 990, 990 (2003). The terms “platform,” “two-sided,” and “multi-sided” are used interchangeably in the literature. See, e.g., Evans, supra, at 325; David S. Evans & Richard Schmalensee, The Industrial Organization of Markets with Two-Sided Platforms, 3 Competition Pol’y Int’l 150, 151 (2007); Lapo Filistrucchi, Damien Geradin, Eric van Damme & Pauline Affeldt, Market Definition in Two-Sided Markets: Theory and Practice, 10 J. Competition L. & Econ. 293, 299 (2014); Rochet & Tirole, supra, at 990. Following conventional usage, I will also use the terms interchangeably.Show More But correctly defining relevant markets is the subject of much controversy.4 4.For a comprehensive treatment of the problem, see William M. Landes & Richard A. Posner, Market Power in Antitrust Cases, 94 Harv. L. Rev. 937 (1981).Show More The case that introduced modern market definition to antitrust, United States v. E.I. du Pont de Nemours & Co. (Cellophane),5 5.351 U.S. 377 (1956).Show More is widely known in antitrust circles for giving birth to its own brand of error: the “Cellophane fallacy.”6 6.E.g., Baker, supra note 1, at 164; Thomas G. Krattenmaker & Steven C. Salop, Appendix A—Analyzing Anticompetitive Exclusion, 56 Antitrust L.J. 71, 80 n.32 (1987) (“This error, now termed the Cellophane fallacy . . . .”); Gene C. Schaerr, The Cellophane Fallacy and the Justice Department’s Guidelines for Horizontal Mergers, 94 Yale L.J. 670, 677 (1985); see Donald F. Turner, Antitrust Policy and the Cellophane Case, 70 Harv. L. Rev. 281, 309 (1956); Landes & Posner, supra note 4, at 960–61 (describing the error in the Cellophane case).Show More American Express itself resulted in a 5‑4 split on the market definition, with the dissent describing the majority’s approach as not only “wrong” but “economic nonsense.”7 7.138 S. Ct. at 2295, 2297 (Breyer, J., dissenting).Show More Even proponents of market definition are dubious about its accuracy,8 8.See Landes & Posner, supra note 4, at 960–61.Show More and at least one prominent antitrust scholar, Louis Kaplow, believes that the problems inherent in market definition are so central as to warrant its abandonment in antitrust.9 9.Louis Kaplow, Why (Ever) Define Markets?, 124 Harv. L. Rev. 437, 440 (2010).Show More

The current debate over market definition is universal, with scholars like Kaplow being joined by jurists, legislators, and regulators arguing not only over how to conduct market definition but whether it needs to be conducted at all. In American Express, Justice Breyer wrote a strong dissent, arguing not only that the majority wrongly defined the relevant market10 10.138 S. Ct. at 2297 (Breyer, J., dissenting).Show More but also that market definition was unnecessary because the district court had found evidence of anticompetitive effects, which obviated the need to define the market in the first place.11 11.Id. at 2296.Show More Legislation proposed in the last Congress by Senator Amy Klobuchar would have removed market definition as a requirement in many antitrust cases12 12.See Competition and Antitrust Law Enforcement Reform Act of 2021, S. 225, 117th Cong. § 13(a) (2021).Show More and would prohibit antitrust courts from requiring market definition in most cases if direct evidence of “actual or likely harm to competition” is present.13 13.Id. § 13(b).Show More The Department of Justice (“DOJ”) and the Federal Trade Commission (“FTC”), as part of their revision of the Horizontal Merger Guidelines, have recently solicited public comment on whether it is “necessary to precisely define [a relevant] market in every case,”14 14.U.S. Dep’t of Just. & U.S. Fed. Trade Comm’n, Request for Information on Merger Enforcement 5 (Jan. 18, 2022) [hereinafter DOJ/FTC Request for Information], https://www.‌regulations.gov/document/FTC-2022-0003-0001 [https://perma.cc/3TSX-GM3D].Show More how to change market definition to include qualitative criteria, or whether to eliminate it if likely anticompetitive effects can be shown.15 15.Id.Show More The FTC doubled down on the expendability of market definition in its recent policy statement on the application of Section 5 of the Federal Trade Commission Act to competition cases.16 16.U.S. Fed. Trade Comm’n, Policy Statement Regarding the Scope of Unfair Methods of Competition Under Section 5 of the Federal Trade Commission Act 10, 15 (Nov. 10, 2022) [hereinafter FTC Policy Statement], https://www.ftc.gov/system/files/ftc_gov/pdf/p221202sec5enforcementpolicystatement_002.pdf [https://perma.cc/8YP4-EU8Q].Show More Such proposals (like Justice Breyer’s) could shift the emphasis in antitrust away from market definition, and the DOJ/FTC proposed changes to the merger guidelines suggest changing how market definition should be conducted—changes with the potential to revolutionize how antitrust cases are litigated. These conversations have placed the meaning and necessity of market definition at the forefront of antitrust law.

This Article reframes the ongoing debate over market definition by taking a step back to consider the problem of market definition more generally. The platform markets at issue in American Express (and subject to recent proposals) present particular challenges to market definition, but in confronting those challenges, the case provides valuable insight into how evidence of anticompetitive effects should (and should not) inform antitrust analysis more generally. There are few clear answers, although what is clear is that Justice Breyer’s (and Senator Klobuchar’s) claim that market definition is unnecessary is not only wrong but illogical.

Reliance on anticompetitive effects is frequently unreliable, and Justice Breyer’s invocation of anticompetitive effects in lieu of market definition demonstrates a deeper misunderstanding about the relationship between observed effects and anticompetitive harm. For instance, the evidence of anticompetitive effects that Justice Breyer would have relied on in American Express—higher prices—are singularly ill-suited to identifying the market power that is the target of the antitrust laws. Indeed, seriously considering Justice Breyer’s reliance on price emphasizes other problems with the economic definition of market power—captured by the Lerner Index17 17.See infra text accompanying notes 26–27.Show More—that has been accepted by antitrust theorists for decades.18 18.See, e.g., IIB Phillip E. Areeda, Herbert Hovenkamp & John L. Solow, Antitrust Law ¶ 503b (5th ed. 2021) (explaining the Lerner Index); Baker, supra note 1, at 142 n.49; Kaplow, supra note 9, at 445 (“This concept of market power is usually expressed using the Lerner Index.”); Landes & Posner, supra note 4, at 938–39.Show More

By reconsidering market definition and the anticompetitive effects that Justice Breyer would have relied on in its stead, we can gain new insight into the way market definition and conceptions of market power have been used and misused in American antitrust law over the last half century. Attacked by Donald Turner as economically inaccurate since its inception,19 19.See Turner, supra note 6, at 309–10.Show More the Cellophane approach to market definition has nevertheless survived. What those like Kaplow have made clear, though, is that the established practice of defining relevant markets is problematic at best. But the problems with current understandings of market definition and market power go far beyond criticisms identified by Kaplow and others. Theories of market definition and market power go to the very core of what is “anticompetitive,” a concept dependent on normative understandings of antitrust law. Indeed, it was just such a criticism over the Court’s understanding of antitrust law, not its understanding of economics, that led Turner to criticize the Court’s market definition in the Cellophane case in the first place.20 20.Id.Show More When the normative basis of Turner’s criticism is understood, it becomes an argument for, not against, antitrust market definition.

This Article proceeds in four Parts. Part I describes the general debate over market definition, whose merits are usually debated with regard to a specific use of market definition: the inference of market power from market shares, a singular emphasis that ignores other ways in which market definition can be useful in antitrust. Part II considers the problem of market definition in American Express and highlights problems with how the district court and Justice Breyer used pricing information as the basis for finding anticompetitive effects, a problem that goes beyond American Express. Part III expands on Part II’s consideration of American Express, explaining how the problem of focusing on price information in American Express is not limited to platform markets but applies generally to analysis of observed market effects in antitrust. Although price increases might reflect anticompetitive market power, they are equally indicative of competition through product differentiation. For the purposes of antitrust, the price effects are secondary to effects on output. That recognition puts in question antitrust scholars’ long-standing reliance on comparisons between price and marginal cost, as expressed in the Lerner Index, to define market power in antitrust cases. In the end, the Lerner Index does not just represent an incomplete understanding of market power; it embodies a normative understanding of competition that does not track the content of the antitrust laws. As explained in Part IV, antitrust actually protects a conception of competition that is far more complex, and quite distinct, from that embodied by the Lerner Index. So understood, market definition is a necessary element to describing the competition that antitrust seeks to protect. For the purposes of applying the antitrust law, relevant markets must be defined not only through economic tools like the Lerner Index; it is also necessary to use other legal and socially relevant features of markets, and Part IV considers what those factors might be. The Article ends with a brief Conclusion.

  1. Jonathan B. Baker, Market Definition: An Analytical Overview, 74 Antitrust L.J. 129, 129 (2007) (“Throughout the history of U.S. antitrust litigation, the outcome of more cases has surely turned on market definition than on any other substantive issue.”). ↑
  2. Ohio v. Am. Express Co., 138 S. Ct. 2274, 2285–87 (2018). ↑
  3. In the economics literature, a “platform” or “two-sided” market is one in which “1) two sets of agents interact through an intermediary or platform, and 2) the decisions of each set of agents affects the outcomes of the other set of agents, typically through an externality.” Marc Rysman, The Economics of Two-Sided Markets, 23 J. Econ. Persps. 125, 125 (2009). Facebook offers a typical example. Facebook produces two products (social media services and advertising services) that are consumed by two distinct groups (social media “friends” and advertisers) and the value of at least one product (the advertising) increases with consumption of the other product (social media) by a different group (“friends”). See Thomas B. Nachbar, Platform Effects, 62 Jurimetrics 1, 8 (2021). These indirect network effects and the externalities they generate separate platforms from other businesses, which also bring together distinct groups of users. Mark Armstrong, Competition in Two-Sided Markets, 37 RAND J. Econ. 668, 673 (2006); David S. Evans, The Antitrust Economics of Multi-Sided Platform Markets, 20 Yale J. on Reg. 325, 332–33 (2003); Geoffrey G. Parker & Marshall W. Van Alstyne, Two-Sided Network Effects: A Theory of Information Product Design, 51 Mgmt. Sci. 1494, 1496, 1502 (2005). Platforms have been canonically described by Jean-Charles Rochet and Jean Tirole. See Jean-Charles Rochet & Jean Tirole, Platform Competition in Two-Sided Markets, 1 J. Eur. Econ. Ass’n 990, 990 (2003). The terms “platform,” “two-sided,” and “multi-sided” are used interchangeably in the literature. See, e.g., Evans, supra, at 325; David S. Evans & Richard Schmalensee, The Industrial Organization of Markets with Two-Sided Platforms, 3 Competition Pol’y Int’l 150, 151 (2007); Lapo Filistrucchi, Damien Geradin, Eric van Damme & Pauline Affeldt, Market Definition in Two-Sided Markets: Theory and Practice, 10 J. Competition L. & Econ. 293, 299 (2014); Rochet & Tirole, supra, at 990. Following conventional usage, I will also use the terms interchangeably. ↑
  4. For a comprehensive treatment of the problem, see William M. Landes & Richard A. Posner, Market Power in Antitrust Cases, 94 Harv. L. Rev. 937 (1981). ↑
  5. 351 U.S. 377 (1956). ↑
  6. E.g., Baker, supra note 1, at 164; Thomas G. Krattenmaker & Steven C. Salop, Appendix A—Analyzing Anticompetitive Exclusion, 56 Antitrust L.J. 71, 80 n.32 (1987) (“This error, now termed the Cellophane fallacy . . . .”); Gene C. Schaerr, The Cellophane Fallacy and the Justice Department’s Guidelines for Horizontal Mergers, 94 Yale L.J. 670, 677 (1985); see Donald F. Turner, Antitrust Policy and the Cellophane Case, 70 Harv. L. Rev. 281, 309 (1956); Landes & Posner, supra note 4, at 960–61 (describing the error in the Cellophane case). ↑
  7. 138 S. Ct. at 2295, 2297 (Breyer, J., dissenting). ↑
  8. See Landes & Posner, supra note 4, at 960–61. ↑
  9. Louis Kaplow, Why (Ever) Define Markets?, 124 Harv. L. Rev. 437, 440 (2010). ↑
  10. 138 S. Ct. at 2297 (Breyer, J., dissenting). ↑
  11. Id. at 2296. ↑
  12.  See Competition and Antitrust Law Enforcement Reform Act of 2021, S. 225, 117th Cong. § 13(a) (2021). ↑
  13. Id. § 13(b). ↑
  14.  U.S. Dep’t of Just. & U.S. Fed. Trade Comm’n, Request for Information on Merger Enforcement 5 (Jan. 18, 2022) [hereinafter DOJ/FTC Request for Information], https://www.‌regulations.gov/document/FTC-2022-0003-0001 [https://perma.cc/3TSX-GM3D]. ↑
  15. Id. ↑
  16.  U.S. Fed. Trade Comm’n, Policy Statement Regarding the Scope of Unfair Methods of Competition Under Section 5 of the Federal Trade Commission Act 10, 15 (Nov. 10, 2022) [hereinafter FTC Policy Statement], https://www.ftc.gov/system/files/ftc_gov/pdf/p221202sec5enforcementpolicystatement_002.pdf [https://perma.cc/8YP4-EU8Q]. ↑
  17. See infra text accompanying notes 26–27. ↑
  18. See, e.g., IIB Phillip E. Areeda, Herbert Hovenkamp & John L. Solow, Antitrust Law ¶ 503b (5th ed. 2021) (explaining the Lerner Index); Baker, supra note 1, at 142 n.49; Kaplow, supra note 9, at 445 (“This concept of market power is usually expressed using the Lerner Index.”); Landes & Posner, supra note 4, at 938–39. ↑
  19. See Turner, supra note 6, at 309–10. ↑

  20. Id. ↑

Disclosing Corporate Diversity

This Article’s central claim is that disclosures can be used instrumentally to increase diversity in corporate America in terms of race, gender, sexual orientation, and disability. Until recently, scholars and policymakers have underappreciated this possibility because diversity was often omitted from the larger Environmental, Social, and Governance (“ESG”) disclosures context, even though, as this Article empirically shows, public companies make diversity disclosures in that context.

Diversity disclosures are important not only for shareholders’ interests in transparency, but also for the benefit of other stakeholders, including employees, customers, and the communities in which companies operate, who want to know whether companies are diverse to determine where to work, what brands to buy, and what companies value. The literature has yet to explore the significance of diversity disclosures for the benefit of all these stakeholders.

This Article argues that legal reform is needed to use disclosures to improve corporate diversity for the benefit of all stakeholders. Policy-makers must go beyond the confines of the securities laws to translate disclosure into societal change. This Article examines contemporary law and policy approaches that fall short of having forward-looking provisions that would have an impact on improving diversity. It proposes disclosure rules with statistical and forward-looking provisions and mechanisms that shareholder and employee activists, and others, can use to pressure companies to improve diversity incrementally.

Introduction

Since 2020, diversity has become a central concern for companies and their leaders, prompting more companies to voluntarily incorporate diversity into their Environmental, Social, and Governance (“ESG”) disclosures.1 1.ESG, which has its origins in the United Nations’ environmental movement, is about integrating environmental, social, and governance issues into business. For an excellent discussion about the origins and ambiguity around the term ESG, see Elizabeth Pollman, The Making and Meaning of ESG 20–29 (Inst. L. & Econ., Working Paper No. 659, 2022).Show More A 2021 survey showed that diversity, equity, and inclusion was the top focus—95% for public companies and 63% for private companies—in ESG reports that companies are currently disclosing or plan to disclose in the future.2 2.Thompson Hine, An ESG Snapshot: Survey Confirms Companies Are Responding to Increasing Expectations 5 (2021), https://admin.thompsonhine.com/wp-content/uploads/202‌2/04/An_ESG_Snapshot.pdf [https://perma.cc/VHV7-9SE8]. Public companies are more likely to disclose ESG matters than private companies. L. Emily Hickman, Information Asymmetry in CSR Reporting: Publicly-Traded Versus Privately-Held Firms, 11 Sustainability Acct., Mgmt. & Pol’y J. 207, 219 (2020).Show More Indeed, as the empirical research in this Article shows, there has been a significant increase in diversity disclosures in companies’ ESG reports in the last five years. This Article defines corporate diversity as the representation and inclusion of employees, management, and board members in a company, by gender, race, ethnicity, LGBTQ+ status, and disability, and the provision of equal employment opportunity.

This Article makes three claims. The first is that disclosures can be used instrumentally to diversify corporate boardrooms and workplaces. The second is that while diversity disclosures are important for shareholders who want to know about diversity in the companies in which they invest, other stakeholders, including employees, suppliers, customers, community members, advocacy groups of various types, activists, reformers, and the public as a whole,3 3.Survey after survey reveals that employees, customers, and the public all want companies to encourage or prioritize workplace diversity and inclusion. See, e.g., Susan Caminiti, Majority of Employees Want to Work for a Company that Values Diversity, Equity and Inclusion, Survey Shows, CNBC: Workforce Wire (Apr. 30, 2021, 3:12 PM), https://www.cnbc.com/2021/04/30/diversity-equity-and-inclusion-are-important-to-workers-survey-shows.html# [https://perma.cc/8NPJ-HZH8]; Shelby Jordan, 64% of Consumers Consider Making an Immediate Purchase After Seeing Diverse Advertisements, New Data Shows, PR Newswire (Nov. 11, 2020), https://www.prnewswire.com/news-releases/64-of-consumers-consider-making-an-immediate-purchase-after-seeing-diverse-advertisements-ne‌w-data-shows-301170981.html [https://perma.cc/5XHT-KECK]; Victoria Petrock, Consumers Expect Brands to Be Inclusive, Insider Intel. (Nov. 25, 2020), https://www.emarketer.com/content/consumers-expect-brands-inclusive [https://perma.cc/D‌M29-8H9G]; Juliana Menasce Horowitz, Americans See Advantages and Challenges in Country’s Growing Racial and Ethnic Diversity, Pew Rsch. Ctr. (May 8, 2019), https://www.pewresearch.org/social-trends/2019/05/08/americans-see-advantages-and-challe‌nges-in-countrys-growing-racial-and-ethnic-diversity/ [https://perma.cc/X568-XDGJ] (reporting that 75% of Americans say it is very or somewhat important for companies to promote racial and ethnic diversity in their workplace).Show More are also interested in diversity disclosures. The literature has yet to explore the importance of corporate diversity disclosures to these other stakeholders. The third is that legislative reform is needed for disclosures to be used as an instrument to increase corporate diversity.

The Article makes theoretical, empirical, and policy contributions in relation to these claims. Theoretically, it brings the ESG and corporate diversity literatures together for the first time. ESG is about the role of business in society, particularly whether and how companies consider the public interest in their practices and policies.4 4.Sean O’Neill, What is the Difference Between CSR and ESG?, Corp. Governance Inst. (July 6, 2022), https://www.thecorporategovernanceinstitute.com/insights/lexicon/what-is-the-difference-between-csr-and-esg [https://perma.cc/R7QY-D8VL].Show More

Scholars have long written about Corporate Social Responsibility (“CSR”) and ESG, and corporate diversity as two separate subjects.5 5.See infra notes 31–36 and accompanying text.Show More CSR and ESG scholarship can be traced to the 1930s debate between Columbia Law School’s Adolph Berle and Harvard Law School’s Merrick Dodd.6 6.Ronald Chen & Jon Hanson, The Illusion of Law: The Legitimating Schemas of Modern Policy and Corporate Law, 103 Mich. L. Rev. 1, 35 (2004).Show More Berle described the protection of shareholders as the critical challenge facing corporate law.7 7.A.A. Berle, Jr., Corporate Powers as Powers in Trust, 44 Harv. L. Rev. 1049, 1049 (1931).Show More Dodd focused on the power dynamics between corporations and society and argued that corporate managers should be attentive not just to shareholders, but to other stakeholders.8 8.E. Merrick Dodd, Jr., For Whom Are Corporate Managers Trustees?, 45 Harv. L. Rev. 1145, 1158–61 (1932).Show More This debate crystallized in the 1970s—at a similar moment as the environmental movement sought to mitigate ecological harm caused by certain corporate practices—with Milton Friedman’s proclamation that managers should act primarily in the interest of shareholders rather than other stakeholders.9 9.Milton Friedman, A Friedman Doctrine—The Social Responsibility of Business is to Increase Its Profits, N.Y. Times (Sept. 13, 1970), https://www.nytimes.com/‌1970/09/13/archives/a-friedman-doctrine-the-social-responsibility-of-business-is-to.html/ [https://perma.cc/6VKK-MWZV].Show More This academic debate is still very much alive today.10 10.See Jill E. Fisch & Steven Davidoff Solomon, Should Corporations Have a Purpose?, 99 Tex. L. Rev. 1309, 1309 (2021); Mark J. Roe, Corporate Purpose and Corporate Competition, 99 Wash. U. L. Rev. 223, 223–25 (2021); Tom C.W. Lin, Incorporating Social Activism, 98 B.U. L. Rev. 1535, 1537–38 (2018); Margaret M. Blair & Lynn A. Stout, A Team Production Theory of Corporate Law, 85 Va. L. Rev. 247, 249–51 (1999); David Millon, Essay, New Game Plan or Business As Usual? A Critique of the Team Production Model of Corporate Law, 86 Va. L. Rev. 1001, 1001–03 (2000); Ronald M. Green, Shareholders as Stakeholders: Changing Metaphors of Corporate Governance, 50 Wash. & Lee L. Rev. 1409, 1409–14 (1993); Oliver Williamson, Corporate Governance, 93 Yale L.J. 1197, 1197–1200 (1984).Show More The Business Roundtable’s declaration in 2019 that companies have a “fundamental commitment to all . . . stakeholders”11 11.Business Roundtable Redefines the Purpose of a Corporation to Promote ‘An Economy that Serves All Americans’, Bus. Roundtable (Aug. 19, 2019), https://www.business‌roundtable.org/business-roundtable-redefines-the-purpose-of-a-corporation-to-promote-an-economy-that-serves-all-americans [https://perma.cc/4UTS-ABFF].Show More further complicated the debate since some scholars have argued that the declaration does not drastically shift companies’ purpose beyond shareholder wealth maximization.12 12.See, e.g., Dorothy S. Lund, Corporate Finance for Social Good, 121 Colum. L. Rev. 1617, 1619–20 (2021). CEOs from 181 companies representing some of America’s largest companies signed the declaration. Bus. Roundtable, supra note 11.Show More

The corporate diversity literature has its roots in the passage of Title VII of the Civil Rights Act of 1964 and the Equal Employment Opportunity Act of 1972, which, among other things, address the role of corporations in gender and racial discrimination in the workplace and the economy.13 13.Civil Rights Act of 1964, Pub. L. No. 88-352, §§ 703–704, 78 Stat. 241, 253–59; Equal Employment Opportunity Act of 1972, Pub. L. No. 92-261, 86 Stat. 103.Show More The U.S. Supreme Court’s diversity discourse has been integrated into corporate policies since the 1990s, which accelerated in 2020.14 14.See, e.g., Regents of Univ. of Cal. v. Bakke, 438 U.S. 265, 313 (1978) (concluding that universities might use race as one factor among others to promote the “robust exchange of ideas” that might flow from a racially diverse academic community); see also Ellen Berrey, The Enigma of Diversity: The Language of Race and the Limits of Racial Justice 27, 196–97 (2015) (discussing the development of diversity management in the late twentieth century).Show More

Traditionally, CSR and ESG disclosures—which are typically not covered by financial metrics—were internal and external facing documents companies used to communicate their philanthropic efforts and their impact on the environment and the communities in which they operate.15 15.Catherine Cote, What is a CSR Report and Why is it Important?, Harv. Bus. Sch. Online (Apr. 20, 2021), https://online.hbs.edu/blog/post/what-is-a-csr-report [https://perma.cc/6XK9‌-SL6M].Show More The CSR and ESG disclosure literature mirrored this traditional form of disclosures by mostly focusing on climate, environmental, and sustainability matters, and to some extent philanthropy, with little to no engagement with diversity.16 16.See, e.g., Cynthia A. Williams, The Securities and Exchange Commission and Corporate Social Transparency, 112 Harv. L. Rev. 1197, 1199–1201 (1999); Russell B. Stevenson, Jr., The SEC and the New Disclosure, 62 Cornell L. Rev. 50, 50–59 (1976); Douglas M. Branson, Progress in the Art of Social Accounting and Other Arguments for Disclosure on Corporate Social Responsibility, 29 Vand. L. Rev. 539, 575–76, 581 (1976); Theodore Sonde & Harvey L. Pitt, Utilizing the Federal Securities Laws to “Clear the Air! Clean the Sky! Wash the Wind!”, 16 How. L.J. 831, 834–35 (1971); David Hess, Social Reporting: A Reflexive Law Approach to Corporate Social Responsiveness, 25 J. Corp. L. 41, 42–46 (1999); Janet E. Kerr, The Creative Capitalism Spectrum: Evaluating Corporate Social Responsibility Through a Legal Lens, 81 Temp. L. Rev. 831, 846 (2008); Thomas Lee Hazen, Social Issues in the Spotlight: The Increasing Need to Improve Publicly-Held Companies’ CSR and ESG Disclosures, 23 U. Pa. J. Bus. L. 740, 741–47 (2021); Daniel C. Esty & Quentin Karpilow, Harnessing Investor Interest in Sustainability: The Next Frontier in Environmental Information Regulation, 36 Yale J. on Regul. 625, 625–28 (2019).Show More Corporate diversity scholarship, on the other hand, has mostly focused on the business case for diversity, largely omitting the CSR and ESG disclosure framework.17 17.See, e.g., Jeffrey Meli & James C. Spindler, The Promise of Diversity, Inclusion, and Punishment in Corporate Governance, 99 Tex. L. Rev. 1387, 1387–93 (2021); Lisa M. Fairfax, Board Diversity Revisited: New Rationale, Same Old Story?, 89 N.C. L. Rev. 855, 855–59 (2011) [hereinafter Fairfax, Revisited] (criticizing the overreliance on business justifications for diversifying corporate boards); Lisa M. Fairfax, The Bottom Line on Board Diversity: A Cost-Benefit Analysis of the Business Rationales for Diversity on Corporate Boards, 2005 Wis. L. Rev. 795, 796–99 [hereinafter Fairfax, Bottom Line]. The exception is Veronica Martinez & Gina-Gail S. Fletcher, Equality Metrics, 130 Yale L.J.F. 869, 869, 875 (2021), which addresses the role of diversity disclosures but in the context of shareholder transparency and decision making.Show More In fact, expanding the ESG literature to include corporate diversity is important for developing new theories of ESG and informing diversity policy as the field changes.

Empirically, this Article shows that, at least in the last five years, public companies have firmly integrated diversity disclosures in their ESG reports. This Article uses machine-learning techniques to analyze 3,461 ESG reports for 1,288 Russell 3000 index companies listed on the Nasdaq Stock Market LLC (“Nasdaq”) and the New York Stock Exchange (“NYSE”) for the five-year period from 2017 to 2021. For example, 95% of corporations mentioned racial or gender diversity in their 2021 ESG disclosures.

In terms of policy, this Article makes the case for using disclosures instrumentally to bring about change that would benefit all stakeholders through new legislation. This Article addresses the limitations of emerging attempts to mandate diversity disclosures, particularly by the Securities and Exchange Commission (“SEC”). Since the 1960s and 1970s, companies have grappled with whether and how to disclose their CSR and ESG policies and practices that impact shareholders, other stakeholders, and society.18 18.See infra Section I.C and accompanying text.Show More Scholars and other commentators have since debated whether the SEC has the authority to require the disclosure of ESG practices.19 19.See generally Williams, supra note 16, at 1205–07 (arguing that the SEC has the authority to require expanded disclosure and should use this authority to ensure “corporate social transparency”); Stevenson, supra note 16, at 58–62 (explaining and rebutting the SEC’s reluctancy to use its authority to require the disclosure of policies related to social goods); Branson, supra note 16, at 631–34 (discussing Judge Charles Richey’s perspective on the SEC’s authority to require social responsibility disclosure); Sonde & Pitt, supra note 16, at 835–36 (discussing the SEC’s opportunity to “help promote the nation’s environmental policy” through disclosure requirements related to the National Environmental Policy Act); Paul G. Mahoney & Julia D. Mahoney, The New Separation of Ownership and Control: Institutional Investors and ESG, 2021 Colum. Bus. L. Rev. 839, 843–45 (cautioning the SEC against adopting ESG disclosure mandates).Show More Even as academic debates have continued, however, corporations began to voluntarily disclose their CSR and ESG reports as early as the 1990s, largely because of shareholder pressure for transparency and information.20 20.See Cathy Hwang & Yaron Nili, Shareholder-Driven Stakeholderism, U. Chi. L. Rev. Online (Apr. 15, 2020), https://lawreviewblog.uchicago.edu/2020/04/15/shareholder-driven-stakeholderism-hwang-nili/ [https://perma.cc/7FTT-RYGP]; Andrew J. Hoffman, A Strategic Response to Investor Activism, 37 Sloan Mgmt. Rev. 51, 51 (1996); Michal Barzuza, Quinn Curtis & David H. Webber, Shareholder Value(s): Index Fund ESG Activism and the New Millennial Corporate Governance, 93 S. Cal. L. Rev. 1243, 1265 (2020); Stavros Gadinis & Amelia Miazad, Corporate Law and Social Risk, 73 Vand. L. Rev. 1401, 1464 (2020).Show More

In August 2021, the SEC approved Nasdaq’s rule requiring companies listed on its exchange to disclose the diversity of their boards pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 , and Rule 19b-4,21 21.15 U.S.C. § 78s(b)(1); 17 C.F.R. § 240.19b-4 (2006).Show More making it the first-ever ESG disclosure mandate. While the rule is an important start to mandating diversity disclosures, the SEC is limited in its authority to use disclosures for social change. This limitation is evidenced by three features of the Nasdaq/SEC rule. First, the rule requires Nasdaq-listed companies to have two diverse board members—at least one director who self‑identifies as female and at least one director who self-identifies as an underrepresented minority or as LGBTQ+—or explain why they lack diversity on their boards.22 22.Underrepresented minority is defined as identifying as Black (or African American), Latinx, Asian, Native American, Alaska Native, Native Hawaiian, Pacific Islander, or a combination of multiple of these ethnicities; LGBTQ+ is defined as an individual who “self-identifies as any of the following: lesbian, gay, bisexual, transgender, or as a member of the queer community.” Order Approving Changes to Listing Rules Related to Board Diversity, 86 Fed. Reg. 44424, 44424–25, 44425 n.18 (Aug. 6, 2021). The SEC itself is looking to propose its own board diversity disclosure regulations for companies and may include disability status in its rules. See Lydia Beyoud & Andrew Ramonas, Disability Advocates Seek Inclusion in SEC Board Diversity Rules, Bloomberg L. (Sept. 30, 2021), https://news.bloomberglaw.com/‌esg/disability-advocates-seek-inclusion-in-sec-board-diversity-rules [https://perma.cc/3Z7W-H2KD].Show More The “explain” portion of this “disclose or explain” approach means that companies do not have to disclose two diverse board members if they can explain why they lack board diversity. The SEC states that, “[w]hile the proposal may have the effect of encouraging some Nasdaq-listed companies to increase diversity on their boards, the proposed rules do not mandate any particular board composition.”23 23.Order Approving Changes to Listing Rules Related to Board Diversity, 86 Fed. Reg. at 44428.Show More Therefore, the rule advances shareholder transparency but stops short of using disclosures to increase board diversity. Second, the rule applies only to boards and would not require the disclosure of employee or executive diversity, which significantly limits its reach. Third, it only applies to public companies listed on the Nasdaq stock exchange; it does not apply to companies listed on other exchanges or private companies with large valuations that are like public companies, thereby omitting a large subset of the economy.

This Article argues that Congress should step in to establish a diversity disclosure obligation that can increase diversity in both public and private companies. The United States House of Representatives recently passed the ESG Disclosure Simplification Act of 2021 (“ESG Disclosure Act”),24 24.The ESG Disclosure Simplification Act was passed as part of the Corporate Governance Improvement and Investor Protection Act, H.R. 1187, 117th Cong. (as passed by House, June 16, 2021). The Bill was originally introduced in the House as the ESG Disclosure Simplification Act (“EDSA”) on February 18, 2021. 167 Cong. Rec. H535 (daily ed. Feb. 18, 2021).Show More which would require companies to disclose their ESG matters, including employee and board diversity.25 25.H.R. 1187 § 603. The Act would also require companies to disclose their environmental and climate risk mitigation measures. Id. § 403.Show More While the proposed ESG Disclosure Act is a significant step toward mandating diversity disclosures for transparency, it lacks a forward-looking component to increase diversity over time.26 26.See Atinuke O. Adediran, Disclosures for Equity, 122 Colum. L. Rev. 865, 873–74 (2022) (explaining how to use disclosures to reach racial equity ends).Show More This Article proposes a comprehensive disclosure regime with statistical and forward-looking components and explains how shareholder and employee activists can use disclosures to push companies to actually increase diversity incrementally over time.

This Article proceeds in four parts. Part I discusses the scholarship on CSR and ESG, the history of movements to make CSR and ESG disclosures mandatory, and the history of voluntary ESG disclosures. Part II discusses contemporary law, policy, and private ordering around diversity disclosures, including the recent Nasdaq/SEC rule mandating diversity disclosures and Congress’s attempt to mandate diversity disclosures in the ESG Disclosure Act. Part III describes the data and methods used for analysis and empirically shows that diversity disclosures are already firmly included in ESG reports. Part IV analyzes the shortcomings of the Nasdaq/SEC and legislative approaches, arguing that because the purpose of securities laws is limited to ensuring transparency for shareholders to make investment decisions, it is imperative to have a comprehensive disclosure regime that can be used to improve board and workplace diversity rather than to merely provide transparency or serve other shareholder interests. Part IV then proposes a comprehensive disclosure legislation that includes statistical information and forward-looking provisions that aim to gradually increase corporate diversity to benefit a broader range of stakeholders. It also discusses the role of shareholder and employee activists as mechanisms to pressure companies to improve diversity under both the proposed regime and the current Nasdaq/SEC “disclose or explain” rule.

  1.  ESG, which has its origins in the United Nations’ environmental movement, is about integrating environmental, social, and governance issues into business. For an excellent discussion about the origins and ambiguity around the term ESG, see Elizabeth Pollman, The Making and Meaning of ESG 20–29 (Inst. L. & Econ., Working Paper No. 659, 2022). ↑
  2.  Thompson Hine, An ESG Snapshot: Survey Confirms Companies Are Responding to Increasing Expectations 5 (2021), https://admin.thompsonhine.com/wp-content/uploads/202‌2/04/An_ESG_Snapshot.pdf [https://perma.cc/VHV7-9SE8]. Public companies are more likely to disclose ESG matters than private companies. L. Emily Hickman, Information Asymmetry in CSR Reporting: Publicly-Traded Versus Privately-Held Firms, 11 Sustainability Acct., Mgmt. & Pol’y J. 207, 219 (2020). ↑
  3. Survey after survey reveals that employees, customers, and the public all want companies to encourage or prioritize workplace diversity and inclusion. See, e.g., Susan Caminiti, Majority of Employees Want to Work for a Company that Values Diversity, Equity and Inclusion, Survey Shows, CNBC: Workforce Wire (Apr. 30, 2021, 3:12 PM), https://www.cnbc.com/2021/04/30/diversity-equity-and-inclusion-are-important-to-workers-survey-shows.html# [https://perma.cc/8NPJ-HZH8]; Shelby Jordan, 64% of Consumers Consider Making an Immediate Purchase After Seeing Diverse Advertisements, New Data Shows, PR Newswire (Nov. 11, 2020), https://www.prnewswire.com/news-releases/64-of-consumers-consider-making-an-immediate-purchase-after-seeing-diverse-advertisements-ne‌w-data-shows-301170981.html [https://perma.cc/5XHT-KECK]; Victoria Petrock, Consumers Expect Brands to Be Inclusive, Insider Intel. (Nov. 25, 2020), https://www.emarketer.com/content/consumers-expect-brands-inclusive [https://perma.cc/D‌M29-8H9G]; Juliana Menasce Horowitz, Americans See Advantages and Challenges in Country’s Growing Racial and Ethnic Diversity, Pew Rsch. Ctr. (May 8, 2019), https://www.pewresearch.org/social-trends/2019/05/08/americans-see-advantages-and-challe‌nges-in-countrys-growing-racial-and-ethnic-diversity/ [https://perma.cc/X568-XDGJ] (reporting that 75% of Americans say it is very or somewhat important for companies to promote racial and ethnic diversity in their workplace). ↑
  4. Sean O’Neill, What is the Difference Between CSR and ESG?, Corp. Governance Inst. (July 6, 2022), https://www.thecorporategovernanceinstitute.com/insights/lexicon/what-is-the-difference-between-csr-and-esg [https://perma.cc/R7QY-D8VL]. ↑
  5. See infra notes 31–36 and accompanying text. ↑
  6. Ronald Chen & Jon Hanson, The Illusion of Law: The Legitimating Schemas of Modern Policy and Corporate Law, 103 Mich. L. Rev. 1, 35 (2004). ↑
  7. A.A. Berle, Jr., Corporate Powers as Powers in Trust, 44 Harv. L. Rev. 1049, 1049 (1931). ↑
  8. E. Merrick Dodd, Jr., For Whom Are Corporate Managers Trustees?, 45 Harv. L. Rev. 1145, 1158–61 (1932). ↑
  9.  Milton Friedman, A Friedman Doctrine—The Social Responsibility of Business is to Increase Its Profits, N.Y. Times (Sept. 13, 1970), https://www.nytimes.com/‌1970/09/13/archives/a-friedman-doctrine-the-social-responsibility-of-business-is-to.html/ [https://perma.cc/6VKK-MWZV]. ↑
  10. See Jill E. Fisch & Steven Davidoff Solomon, Should Corporations Have a Purpose?, 99 Tex. L. Rev. 1309, 1309 (2021); Mark J. Roe, Corporate Purpose and Corporate Competition, 99 Wash. U. L. Rev. 223, 223–25 (2021); Tom C.W. Lin, Incorporating Social Activism, 98 B.U. L. Rev. 1535, 1537–38 (2018); Margaret M. Blair & Lynn A. Stout, A Team Production Theory of Corporate Law, 85 Va. L. Rev. 247, 249–51 (1999); David Millon, Essay, New Game Plan or Business As Usual? A Critique of the Team Production Model of Corporate Law, 86 Va. L. Rev. 1001, 1001–03 (2000); Ronald M. Green, Shareholders as Stakeholders: Changing Metaphors of Corporate Governance, 50 Wash. & Lee L. Rev. 1409, 1409–14 (1993); Oliver Williamson, Corporate Governance, 93 Yale L.J. 1197, 1197–1200 (1984). ↑
  11. Business Roundtable Redefines the Purpose of a Corporation to Promote ‘An Economy that Serves All Americans’, Bus. Roundtable (Aug. 19, 2019), https://www.business‌roundtable.org/business-roundtable-redefines-the-purpose-of-a-corporation-to-promote-an-economy-that-serves-all-americans [https://perma.cc/4UTS-ABFF]. ↑
  12. See, e.g., Dorothy S. Lund, Corporate Finance for Social Good, 121 Colum. L. Rev. 1617, 1619–20 (2021). CEOs from 181 companies representing some of America’s largest companies signed the declaration. Bus. Roundtable, supra note 11. ↑
  13. Civil Rights Act of 1964, Pub. L. No. 88-352, §§ 703–704, 78 Stat. 241, 253–59; Equal Employment Opportunity Act of 1972, Pub. L. No. 92-261, 86 Stat. 103. ↑
  14. See, e.g., Regents of Univ. of Cal. v. Bakke, 438 U.S. 265, 313 (1978) (concluding that universities might use race as one factor among others to promote the “robust exchange of ideas” that might flow from a racially diverse academic community); see also Ellen Berrey, The Enigma of Diversity: The Language of Race and the Limits of Racial Justice 27, 196–97 (2015) (discussing the development of diversity management in the late twentieth century). ↑
  15. Catherine Cote, What is a CSR Report and Why is it Important?, Harv. Bus. Sch. Online (Apr. 20, 2021), https://online.hbs.edu/blog/post/what-is-a-csr-report [https://perma.cc/6XK9‌-SL6M]. ↑
  16. See, e.g., Cynthia A. Williams, The Securities and Exchange Commission and Corporate Social Transparency, 112 Harv. L. Rev. 1197, 1199–1201 (1999); Russell B. Stevenson, Jr., The SEC and the New Disclosure, 62 Cornell L. Rev. 50, 50–59 (1976); Douglas M. Branson, Progress in the Art of Social Accounting and Other Arguments for Disclosure on Corporate Social Responsibility, 29 Vand. L. Rev. 539, 575–76, 581 (1976); Theodore Sonde & Harvey L. Pitt, Utilizing the Federal Securities Laws to “Clear the Air! Clean the Sky! Wash the Wind!”, 16 How. L.J. 831, 834–35 (1971); David Hess, Social Reporting: A Reflexive Law Approach to Corporate Social Responsiveness, 25 J. Corp. L. 41, 42–46 (1999); Janet E. Kerr, The Creative Capitalism Spectrum: Evaluating Corporate Social Responsibility Through a Legal Lens, 81 Temp. L. Rev. 831, 846 (2008); Thomas Lee Hazen, Social Issues in the Spotlight: The Increasing Need to Improve Publicly-Held Companies’ CSR and ESG Disclosures, 23 U. Pa. J. Bus. L. 740, 741–47 (2021); Daniel C. Esty & Quentin Karpilow, Harnessing Investor Interest in Sustainability: The Next Frontier in Environmental Information Regulation, 36 Yale J. on Regul. 625, 625–28 (2019). ↑
  17. See, e.g., Jeffrey Meli & James C. Spindler, The Promise of Diversity, Inclusion, and Punishment in Corporate Governance, 99 Tex. L. Rev. 1387, 1387–93 (2021); Lisa M. Fairfax, Board Diversity Revisited: New Rationale, Same Old Story?, 89 N.C. L. Rev. 855, 855–59 (2011) [hereinafter Fairfax, Revisited] (criticizing the overreliance on business justifications for diversifying corporate boards); Lisa M. Fairfax, The Bottom Line on Board Diversity: A Cost-Benefit Analysis of the Business Rationales for Diversity on Corporate Boards, 2005 Wis. L. Rev. 795, 796–99 [hereinafter Fairfax, Bottom Line]. The exception is Veronica Martinez & Gina-Gail S. Fletcher, Equality Metrics, 130 Yale L.J.F. 869, 869, 875 (2021), which addresses the role of diversity disclosures but in the context of shareholder transparency and decision making. ↑
  18. See infra Section I.C and accompanying text. ↑
  19. See generally Williams, supra note 16, at 1205–07 (arguing that the SEC has the authority to require expanded disclosure and should use this authority to ensure “corporate social transparency”); Stevenson, supra note 16, at 58–62 (explaining and rebutting the SEC’s reluctancy to use its authority to require the disclosure of policies related to social goods); Branson, supra note 16, at 631–34 (discussing Judge Charles Richey’s perspective on the SEC’s authority to require social responsibility disclosure); Sonde & Pitt, supra note 16, at 835–36 (discussing the SEC’s opportunity to “help promote the nation’s environmental policy” through disclosure requirements related to the National Environmental Policy Act); Paul G. Mahoney & Julia D. Mahoney, The New Separation of Ownership and Control: Institutional Investors and ESG, 2021 Colum. Bus. L. Rev. 839, 843–45 (cautioning the SEC against adopting ESG disclosure mandates). ↑
  20. See Cathy Hwang & Yaron Nili, Shareholder-Driven Stakeholderism, U. Chi. L. Rev. Online (Apr. 15, 2020), https://lawreviewblog.uchicago.edu/2020/04/15/shareholder-driven-stakeholderism-hwang-nili/ [https://perma.cc/7FTT-RYGP]; Andrew J. Hoffman, A Strategic Response to Investor Activism, 37 Sloan Mgmt. Rev. 51, 51 (1996); Michal Barzuza, Quinn Curtis & David H. Webber, Shareholder Value(s): Index Fund ESG Activism and the New Millennial Corporate Governance, 93 S. Cal. L. Rev. 1243, 1265 (2020); Stavros Gadinis & Amelia Miazad, Corporate Law and Social Risk, 73 Vand. L. Rev. 1401, 1464 (2020). ↑
  21. 15 U.S.C. § 78s(b)(1); 17 C.F.R. § 240.19b-4 (2006). ↑
  22. Underrepresented minority is defined as identifying as Black (or African American), Latinx, Asian, Native American, Alaska Native, Native Hawaiian, Pacific Islander, or a combination of multiple of these ethnicities; LGBTQ+ is defined as an individual who “self-identifies as any of the following: lesbian, gay, bisexual, transgender, or as a member of the queer community.” Order Approving Changes to Listing Rules Related to Board Diversity, 86 Fed. Reg. 44424, 44424–25, 44425 n.18 (Aug. 6, 2021). The SEC itself is looking to propose its own board diversity disclosure regulations for companies and may include disability status in its rules. See Lydia Beyoud & Andrew Ramonas, Disability Advocates Seek Inclusion in SEC Board Diversity Rules, Bloomberg L. (Sept. 30, 2021), https://news.bloomberglaw.com/‌esg/disability-advocates-seek-inclusion-in-sec-board-diversity-rules [https://perma.cc/3Z7W-H2KD]. ↑
  23. Order Approving Changes to Listing Rules Related to Board Diversity, 86 Fed. Reg. at 44428. ↑
  24. The ESG Disclosure Simplification Act was passed as part of the Corporate Governance Improvement and Investor Protection Act, H.R. 1187, 117th Cong. (as passed by House, June 16, 2021). The Bill was originally introduced in the House as the ESG Disclosure Simplification Act (“EDSA”) on February 18, 2021. 167 Cong. Rec. H535 (daily ed. Feb. 18, 2021). ↑
  25. H.R. 1187 § 603. The Act would also require companies to disclose their environmental and climate risk mitigation measures. Id. § 403. ↑

  26. See Atinuke O. Adediran, Disclosures for Equity, 122 Colum. L. Rev. 865, 873–74 (2022) (explaining how to use disclosures to reach racial equity ends). ↑

Property against Legality: Takings after Cedar Point

In the American constitutional tradition, a zealous judicial defense of property is closely aligned with the idea of “the rule of law.” Conventional wisdom holds that the Takings Clause of the Fifth Amendment vindicates both property rights and the rule of law by foreclosing arbitrary, lawless state action. But the standard story linking property rights, legality, and a constraint on arbitrary governance is more commonly stipulated than analyzed. This Article uses an apparent sharp break in takings jurisprudence, the United States Supreme Court’s June 2021 decision in Cedar Point Nursery v. Hassid, to closely scrutinize the relationship between legality and property rights. To that end, it offers first a careful analysis of the sharp rupture that Cedar Point makes in takings jurisprudence. Not only is the Court’s result difficult to explain in terms of precedent or traditional legal methods, it also destabilizes a previously settled and reasonably predictable litigation landscape. As a result, it seeds profound uncertainty on the legal ground because it signals a dissolution of the constraining effect formerly realized by standard tools of legal reasoning. There is, further, no obvious way for the Court to restore stability and predictability to the doctrine without drawing new, arbitrary lines. In consequence, takings law will likely abide in confusion, not certainty, for the foreseeable future. Cedar Point’s vindication of property rights hence comes at the paradoxical cost of dramatically increasing the space for decisions unguided by law by one group of officials in the judiciary.

A close reading of Cedar Point invites a more general and abstract analysis of the complex, nuanced relationship between the rule of law and property rights. Drawing on the general jurisprudential theories of H.L.A. Hart and other legal positivists, I use the decision as a launching point for a larger exploration of ways in which the rule of law can be incompletely realized to paradoxical and even socially harmful effect. Placing property at the center of the rule of law, I suggest, can be consistent with, or even an incitement to, serious derogation of the rule of law. Doing so can undermine rule-of-law goals, such as constraining arbitrary rule. This suggests a need to decenter property rights in accounts of the rule of law, and to explore, in more nuanced and grounded fashion, how the practice of judicial review mediates systemic values of legality and predictability. In short, if we value the rule of law, it may in general be appropriate to take a more skeptical, and so more contingent, view of both property as a legal institution, and also the courts as a source of legality and stability.

Introduction

Property and its zealous defense are closely associated with the rule of law in the American constitutional tradition. A “total, arbitrary, and capricious power” is conceived as the enemy of both.1 1.Kenneth R. Minogue, The Concept of Property and Its Contemporary Significance, in NomosXXII: Property 3, 5 (J. Roland Pennock & John W. Chapman eds., 1980).Show More In Federalist 70, Alexander Hamilton thus termed the constitutional “protection of property against those irregular and high handed combinations, which sometimes interrupt the ordinary course of justice.”2 2.The Federalist No. 70, at 471 (Alexander Hamilton) (Jacob E. Cooke ed., 1961).Show More Writing just after the Constitution’s ratification, James Madison warned that “just government” and “secure” property are imperiled by “arbitrary restrictions, exemptions, and monopolies [that] deny to part of its citizens that free use of their faculties . . . which not only constitute their property in the general sense of the word; but are the means of acquiring property strictly so called.”3 3.James Madison, Property, Nat’l Gazette, Mar. 27, 1792, reprinted in 14 The Papers of James Madison 266, 267 (Robert A. Rutland et al. eds., 1983).Show More John Adams agreed. He opined that “[p]roperty must be secured, or liberty cannot exist.”4 4.Cedar Point Nursery v. Hassid, 141 S. Ct. 2063, 2071 (2021) (quoting John Adams, Discourses on Davila, in 6 The Works of John Adams 223, 280 (Charles Francis Adams ed., 1851)).Show More In a leading constitutional treatise of the early Republic, St. George Tucker also identified the Takings Clause of the Fifth Amendment as a means “to restrain the arbitrary and oppressive mode of obtaining supplies for the army, and other public uses.”5 5.St. George Tucker, 1 Blackstone’s Commentaries: With Notes of Reference, to the Constitution and Laws, of the Federal Government of the United States; and of the Commonwealth of Virginia, app. at 305–06 (Augustus M. Kelley 1969) (1803); see also Armstrong v. United States, 364 U.S. 40, 49 (1960) (describing the Clause’s aim as preventing the 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”).Show More The U.S. Supreme Court concurs. Citing Madison, Adams, and others, the Justices have posited that enforcement of the Takings Clause “empowers persons to shape and to plan their own destiny in a world where governments are always eager to do so for them.”6 6.Murrv.Wisconsin, 137 S. Ct. 1933, 1943 (2017); Cedar Point, 141 S. Ct. at 2071 (quoting Murr, 137 S. Ct. at 1943); see also Sveen v. Melin, 138 S. Ct. 1815, 1827 (2018) (Gorsuch, J., dissenting) (“Federalists like Madison countered that the rule of law permitted ‘property rights and liberty interests [to] be dissolved only by prospective laws of general applicability.’” (citation omitted)). The same theme is found in academic literature. See Richard A. Epstein, Design for Liberty: Private Property, Public Administration, and the Rule of Law 12 (2011) (describing a “close connection” between property’s protection and the rule of law); James W. Ely, Jr., Property Rights and Judicial Activism, 1 Geo. J.L. & Pub. Pol’y 125, 126 (2002) (“The Framers realized that robust protection of the rights of property owners undergirds liberty by diffusing power and protecting individual autonomy from governmental control.”).Show More Judicial protection of property rights serves the rule of law, on this account, by making state action predictable, by restraining arbitrary uses of state power, and by empowering citizens and others to chart their own “destinies” free of government control.

In this way, the idea of the rule of law, albeit not mentioned explicitly in the Constitution, has become “central to our political and rhetorical traditions, possibly even to our sense of national identity.”7 7.Richard H. Fallon, Jr., “The Rule of Law” as a Concept in Constitutional Discourse, 97 Colum. L. Rev. 1, 3 (1997).Show More Scholars keenly debate what the rule of law—which is also sometimes called the principle of legality8 8.See, e.g., Lon L. Fuller, The Morality of Law 44 (rev. ed. 1969) (using the phrase “the demands of legality” to capture the rule of law).Show More—requires.9 9.Jeremy Waldron, Is the Rule of Law an Essentially Contested Concept (in Florida)?, 21 Law & Phil. 137, 140–44 (2002) (surveying disputes over its meaning).Show More But a kernel of common ground is apparent: the rule of law is commonly defined as the law’s clarity, stability, and predictability.10 10.Fuller, supra note 8, at 39 (listing traits of the rule of law, including clarity and the capacity to be followed).Show More These qualities foster “confidence about the legal consequences of their actions.”11 11.Landgraf v. USI Film Prods., 511 U.S. 244, 266 (1994); see also Lawrence B. Solum, Equity and the Rule of Law, in Nomos XXXVI: The Rule of Law 120, 121 (Ian Shapiro ed., 1994) (including “generality, publicity, and regularity” among the rule of law’s features).Show More In contrast, state actions animated by “caprice, passion, bias, [or] prejudice” are all “antithetical to the rule of law.”12 12.TXO Prod. Corp. v. Alliance Res. Corp., 509 U.S. 443, 475 (1993) (O’Connor, J., dissenting). The association of the rule of law with the constraint of official action goes back to a Victorian legal theorist who was one of the early adopters of the term “rule of law.” A.V. Dicey, Introduction to the Study of the Law of the Constitution 181–205 (10th ed. 1959).Show More As such, they cannot be ranked as properly legalistic state action. Such improper—but not, note well, ipso facto illegal—species of official action are impossible if those with official power “exercise their power within a constraining framework of public norms, rather than on the basis of their own preferences, their own ideology, or their own individual sense of right and wrong.”13 13.Jeremy Waldron, The Concept and the Rule of Law, 43 Ga. L. Rev. 1, 6 (2008) [hereinafter Waldron, The Concept and the Rule].Show More Clear, predictable, and stable law binds officials at the same time that it guides citizens. Indeed, the two guidance functions are entwined. An official’s “arbitrary” exercise of power is not just the rule of law’s antipode.14 14.Joseph Raz, The Rule of Law and its Virtue, in The Authority of Law: Essays on Law and Morality 210, 224 (1979) [hereinafter Raz, Rule of Law and its Virtue] (“The law inevitably creates a great danger of arbitrary power—the rule of law is designed to minimize the danger created by the law itself.”).Show More It is also the antithesis of individual liberty.15 15.The kind of liberty protected by the rule of law is, again, contested and plural. See Brian Z. Tamanaha, On the Rule of Law: History, Politics, Theory 34–35 (2004) (distinguishing four kinds of freedom protected by the rule of law). The most relevant here are the freedom from unlicensed (and so unpredictable) legal constraint, and the preservation of a zone of personal autonomy. Id.Show More And so, in this standard narrative, there is a profound complementarity between the rule of law, property rights, and liberty.16 16.Some accounts go further and suggest that it is the propertied who will have the leisure and the resources to defend rule of laws. Minogue, supra note 1, at 8.Show More

This Article interrogates this standard account of how property rights and the rule of law relate to each other in American constitutional law. Its point of departure is a 2021 Supreme Court opinion about the constitutional status of property rights. That judgment is important in its own right. It changes, potentially quite dramatically, the scope of constitutional protection for real property under the Takings Clause of the Fifth Amendment.17 17.See U.S. Const. amend. V (stating that “private property [shall not] be taken for public use, without just compensation”).Show More Whatever its exact effects on the ground (literally!) may be, it certainly marks a sea change in Fifth Amendment jurisprudence.

Cedar Point Nursery v. Hassid18 18.141 S. Ct. 2063 (2021).Show More held that a 1976 California “take access” regulation permitting union organizers to approach and talk to agricultural workers was a taking requiring compensation under the Fifth Amendment.19 19.Cal. Code Regs. tit. 8, § 20900(e)(3) (2021); see also Cedar Point, 141 S. Ct. at 2069, 2072 (describing regulatory framework for agricultural labor under California law).Show More Part of a larger constitutional transformation sweeping over the separation of powers, the Religion Clauses, and abortion jurisprudence during the Roberts Court, Cedar Point has received less attention than other recent doctrinal convulsions. This neglect is unjustified.

A first contribution of this Article is to explore the possibility that the decision prefigures a dramatic and destabilizing shift in the nature of constitutional property. The legal uncertainty unleashed by that opinion is not likely to abate given the absence of any stable limit on the Court’s apparent reworking of the concept of constitutional property. Of larger theoretical significance, Cedar Point illustrates one way in which property rights and the rule of law can diverge, notwithstanding the standard story, to enlarge the scope for arbitrary state action. Hence, it invites the Article’s second, more theoretical contribution—a nuanced and careful theorization of property’s complex, many-stranded relation to the rule of law.

My analysis begins with the particulars of Cedar Point. The decision’s immediate effect, of course, was to change the terms for the increasingly beleaguered organized labor movement in one of the nation’s most important and fertile agricultural breadbaskets. Its longer-term, more abstract consequence was its implicit invitation for the future reworking of takings doctrine. In particular, the 2021 decision unraveled a central organizing conceit of takings jurisprudence. The latter has stabilized and channeled potential litigants’ expectations for decades. By diminishing the predictive value of precedent respecting property’s boundaries, the Court created uncertainty where property owners and officials previously had benefited from stable expectations.

Prior to Cedar Point, owners and officials got a reasonably clear sense of litigation outcomes by asking whether a state action was an “appropriation” or “regulation” as those words are used in everyday conversation. Under longstanding doctrine, legal challenges to appropriations generally prevailed under a “per se” rule. In contrast, the balancing test applicable to regulations typically, albeit far from inevitably, tilted in favor of the government. Distinguishing appropriations from regulations, moreover, was relatively straightforward when it came to real and chattel property. If the government indefinitely deprived you of the whole or part of the physical thing, you could typically expect to win a takings case.

To be sure, the doctrine elsewhere had other wrinkles. But in the vast majority of cases, these mattered only on 1L property exams and (very occasionally) in appellate litigation. The ensuing doctrine was relatively transparent, even to lay people unburdened by the intellectual pretensions of a legal education.

The Court in Cedar Point did not openly abandon the distinction between appropriations and regulations. More perplexingly, it invoked that distinction while refusing to deploy the ordinary meaning of an “appropriation.” While the verbal formulation of the law remained the same, a key doctrinal term with a clear and predictable lay meaning was replaced with an amorphous category of uncertain and unpredictable application. Legal and ordinary language hence parted company. By diminishing the clarifying force of doctrine, the Court created uncertainty where property owners and officials previously had reasonably stable expectations. This is one way in which Cedar Point revealed a tension between property rights and the clarity, stability, and predictability ambitions of the rule of law. Protecting the first can diminish the latter.

Another tension underlying the majority’s reasoning can be discerned by attending to its methodological choices: the Cedar Point Court ostentatiously relied on dictionaries, ordinary public meaning, and the binding force of precedent. But read closely, each of these argumentative threads unravel. Dictionary definitions were selectively picked; actual lay usage was ignored; and precedent was invoked only via selective quotation—distorting earlier constitutional holdings. In execution, therefore, Cedar Point’s vindication of property rights stood at odds with the application of familiar legal methods central to the rule of law.20 20.See Andrei Marmor, The Rule of Law and Its Limits, 23 Law & Phil. 1, 3 (2004).Show More Nor does the decision promise future clarity or stability.

Worse, Cedar Point did not ask or answer a crucial question: What distinguishes an impermissible “appropriation” from a “regulation” under the Takings Clause? The majority opinion offers hints. But none of these hold promise as a principled basis on which to draw a line between regulation and appropriation. Indeed, the ultimate, long-term effect of Cedar Point may well be to collapse the longstanding distinction between appropriations and regulations—a legal regime where most government action would be evaluated as an appropriation, even if it did not entail a physical invasion by the government. This doctrine’s end-state would dramatically expand judicial discretion, work avulsive change to the authority of state and local governments, and (ironically) foster fresh uncertainty about the resolution of inevitable and pervasive boundary disputes that arise in property law.

There is a bigger principle at stake here too. This close reading of Cedar Point further invites reappraisal of the way in which property and the rule of law have been theorized as working together in American constitutional law: Do they really intertwine as tightly as the standard story holds? A starting point for this analytic enterprise is a distinction drawn by the legal theorists H.L.A. Hart and Meir Dan-Cohen. Hart carved law up into “primary” rules applicable to the citizenry at large, and “secondary” rules that bind officials.21 21.H.L.A. Hart, The Concept of Law 99 (Penelope A. Bulloch & Joseph Raz postscript eds., 2d ed. 1994) [hereinafter Hart, Concept of Law] (“The union of primary and secondary rules is at the centre of a legal system . . . .”).Show More Dan-Cohen, reasoning in a similar vein, distinguished “conduct rules” covering everyone, and “decision rules” directed at officials.22 22.Meir Dan-Cohen, Decision Rules and Conduct Rules: On Acoustic Separation in Criminal Law, 97 Harv. L. Rev. 625, 627 (1984).Show More The law, both Hart and Dan-Cohen thereby insisted, speaks in subtly differently accented voices to the public and to its official custodians.

Cedar Point illustrates the possibility that the rule of law can come apart along this seam. The ordinary subjects of property law remain subject to a body of (somewhat more ambiguous) rules after Cedar Point, even as the Court shrugs off the disciplining constraints imposed by legal method. The rule of law can thus be roughly maintained for primary rules of property, even as it dissipates as a constraint upon officials. As such, we can observe what I call “first-order legality” for rules applicable to private persons, without the “second-order legality” usually experienced by officials. This dichotomy, and the resulting internal fracturing, complicates canonical accounts of the rule of law by showing how it is possible for the qualities of certainty, predictability, and stability to be maintained with respect to one domain of the law, but not another. Consequently, legality can be partial. At worst, it can potentially come to be at war with itself.

With this bifurcated account of the rule of law in hand, it is possible to interrogate in a more considered way the supposedly monotonic relationships between legality, arbitrary rule, and the ambition of legality. The rule of law, at least in one of its traditions, is often distilled into an image of rigid, impenetrable property rights.23 23.See sources cited supra notes 2–5.Show More These, in turn, are hitched to the aspiration for freedom from arbitrary rule and economic growth. But even as Cedar Point offered an account of property as a cornerstone of the rule of law in precisely these terms, each element of this argument was unraveling. No longer is it clear that centering legality around property minimizes the scope for arbitrary decision making by officials. To the contrary, an account of the rule of law centered around property rights may either increase or decrease the risk of such arbitrary rule without a clear effect on economic growth or social welfare. Legality, when conceptualized in terms of property rights, thus can undermine widely shared normative goals it purports to advance. Their relation is contingent, not necessary.

This Article focuses on the relationship of takings jurisprudence to the rule of law. Existing commentary criticizes Cedar Point’s “hostility to worker power” and “antidemocracy” effects,24 24.Nikolas Bowie, Comment, Antidemocracy, 135 Harv. L. Rev. 160, 163 (2021). For a similar, if more equivocal, suggestion, see Cristina M. Rodríguez, Foreword: Regime Change, 135 Harv. L. Rev. 2, 32 (2021) (“[T]he Supreme Court’s burgeoning jurisprudence . . . has turned to the Bill of Rights, primarily the First Amendment, to limit social welfare and good-government regulation . . . .”); see also Linda Greenhouse, Justice on the Brink: The Death of Ruth Bader Ginsburg, the Rise of Amy Coney Barrett, and Twelve Months That Transformed the Supreme Court 224 (2021) (describing the case as a “potentially transformational development in the law of property rights . . . likely to hobble government land use regulation”). For a contrary view, see Julia D. Mahoney, Cedar Point Nursery and the End of the New Deal Settlement, 11 Brigham-Kanner Prop. Rts. J. 43, 64 (2022) (arguing that “Cedar Point represents an evolution, not a revolution, in the Court’s property rights jurisprudence” while celebrating the Court’s result and analysis). As it will become clear, I respectfully disagree with Professor Mahoney’s conclusions for reasons spelled out at length in this Article.Show More or alternatively defends its “classical liberal” pedigree.25 25.Sam Spiegelman & Gregory C. Sisk, Cedar Point: Lockean Property and the Search for a Lost Liberalism, 2020–21 Cato Sup. Ct. Rev. 165, 178–81 (2021) (talking of “the takings muddle”).Show More In contrast, I explore the Court’s new takings doctrine in relation to the ideal of the rule of law.26 26.Cf. Cedar Point Nursery v. Hassid, 141 S. Ct. 2063, 2071 (2021) (“As John Adams tersely put it, ‘[p]roperty must be secured, or liberty cannot exist.’” (citation omitted)).Show More The property/rule of law connection has been previously explored in a set of lectures by Professor Jeremy Waldron. He, however, trains on the relation of Lockean accounts of property to the rule of law though a political philosophy lens.27 27.Jeremy Waldron, The Rule of Law and the Measure of Property 27 (2012) [hereinafter Waldron, Measure of Property] (doubting that “Locke’s account” of property yields a specific definition of the rule of law).Show More My analysis and conclusions unfold along a different, American-constitutional-law track. Nevertheless, like Waldron, I hope to contribute to larger theoretical debates about the rule of law and its constituent parts.

Part I explores the basic architecture of takings doctrine prior to Cedar Point. Part II then offers a close reading of that decision. I carefully analyze its methodological underpinnings and doctrinal aftermath. Both in its origin and in its reasoning, I demonstrate, the opinion is in sharp tension with legality norms. Part III then broadens the analytic lens to evaluate the role that property plays in understandings of the rule of law. Using Cedar Point as an opening wedge for inquiry, it demonstrates how legality can unravel in ways that foster arbitrary rule and undermine economic growth. Of course, these are precisely the outcomes the rule of law is intended to stave off.

  1.  Kenneth R. Minogue, The Concept of Property and Its Contemporary Significance, in Nomos XXII: Property 3, 5 (J. Roland Pennock & John W. Chapman eds., 1980). ↑
  2. The Federalist No. 70, at 471 (Alexander Hamilton) (Jacob E. Cooke ed., 1961). ↑
  3. James Madison, Property, Nat’l Gazette, Mar. 27, 1792, reprinted in 14 The Papers of James Madison 266, 267 (Robert A. Rutland et al. eds., 1983). ↑
  4.  Cedar Point Nursery v. Hassid, 141 S. Ct. 2063, 2071 (2021) (quoting John Adams, Discourses on Davila, in 6 The Works of John Adams 223, 280 (Charles Francis Adams ed., 1851)). ↑
  5.  St. George Tucker, 1 Blackstone’s Commentaries: With Notes of Reference, to the Constitution and Laws, of the Federal Government of the United States; and of the Commonwealth of Virginia, app. at 305–06 (Augustus M. Kelley 1969) (1803); see also Armstrong v. United States, 364 U.S. 40, 49 (1960) (describing the Clause’s aim as preventing the 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”). ↑
  6. Murr v. Wisconsin, 137 S. Ct. 1933, 1943 (2017); Cedar Point, 141 S. Ct. at 2071 (quoting Murr, 137 S. Ct. at 1943); see also Sveen v. Melin, 138 S. Ct. 1815, 1827 (2018) (Gorsuch, J., dissenting) (“Federalists like Madison countered that the rule of law permitted ‘property rights and liberty interests [to] be dissolved only by prospective laws of general applicability.’” (citation omitted)). The same theme is found in academic literature. See Richard A. Epstein, Design for Liberty: Private Property, Public Administration, and the Rule of Law 12 (2011) (describing a “close connection” between property’s protection and the rule of law); James W. Ely, Jr., Property Rights and Judicial Activism, 1 Geo. J.L. & Pub. Pol’y 125, 126 (2002) (“The Framers realized that robust protection of the rights of property owners undergirds liberty by diffusing power and protecting individual autonomy from governmental control.”). ↑
  7. Richard H. Fallon, Jr., “The Rule of Law” as a Concept in Constitutional Discourse, 97 Colum. L. Rev. 1, 3 (1997). ↑
  8. See, e.g., Lon L. Fuller, The Morality of Law 44 (rev. ed. 1969) (using the phrase “the demands of legality” to capture the rule of law). ↑
  9. Jeremy Waldron, Is the Rule of Law an Essentially Contested Concept (in Florida)?, 21 Law & Phil. 137, 140–44 (2002) (surveying disputes over its meaning). ↑
  10. Fuller, supra note 8, at 39 (listing traits of the rule of law, including clarity and the capacity to be followed). ↑
  11. Landgraf v. USI Film Prods., 511 U.S. 244, 266 (1994); see also Lawrence B. Solum, Equity and the Rule of Law, in Nomos XXXVI: The Rule of Law 120, 121 (Ian Shapiro ed., 1994) (including “generality, publicity, and regularity” among the rule of law’s features). ↑
  12.  TXO Prod. Corp. v. Alliance Res. Corp., 509 U.S. 443, 475 (1993) (O’Connor, J., dissenting). The association of the rule of law with the constraint of official action goes back to a Victorian legal theorist who was one of the early adopters of the term “rule of law.” A.V. Dicey, Introduction to the Study of the Law of the Constitution 181–205 (10th ed. 1959). ↑
  13. Jeremy Waldron, The Concept and the Rule of Law, 43 Ga. L. Rev. 1, 6 (2008) [hereinafter Waldron, The Concept and the Rule]. ↑
  14. Joseph Raz, The Rule of Law and its Virtue, in The Authority of Law: Essays on Law and Morality 210, 224 (1979) [hereinafter Raz, Rule of Law and its Virtue] (“The law inevitably creates a great danger of arbitrary power—the rule of law is designed to minimize the danger created by the law itself.”). ↑
  15. The kind of liberty protected by the rule of law is, again, contested and plural. See Brian Z. Tamanaha, On the Rule of Law: History, Politics, Theory 34–35 (2004) (distinguishing four kinds of freedom protected by the rule of law). The most relevant here are the freedom from unlicensed (and so unpredictable) legal constraint, and the preservation of a zone of personal autonomy. Id. ↑
  16. Some accounts go further and suggest that it is the propertied who will have the leisure and the resources to defend rule of laws. Minogue, supra note 1, at 8. ↑
  17. See U.S. Const. amend. V (stating that “private property [shall not] be taken for public use, without just compensation”). ↑
  18. 141 S. Ct. 2063 (2021). ↑
  19. Cal. Code Regs. tit. 8, § 20900(e)(3) (2021); see also Cedar Point, 141 S. Ct. at 2069, 2072 (describing regulatory framework for agricultural labor under California law). ↑
  20. See Andrei Marmor, The Rule of Law and Its Limits, 23 Law & Phil. 1, 3 (2004). ↑
  21. H.L.A. Hart, The Concept of Law 99 (Penelope A. Bulloch & Joseph Raz postscript eds., 2d ed. 1994) [hereinafter Hart, Concept of Law] (“The union of primary and secondary rules is at the centre of a legal system . . . .”). ↑
  22. Meir Dan-Cohen, Decision Rules and Conduct Rules: On Acoustic Separation in Criminal Law, 97 Harv. L. Rev. 625, 627 (1984). ↑
  23. See sources cited supra notes 2–5. ↑
  24. Nikolas Bowie, Comment, Antidemocracy, 135 Harv. L. Rev. 160, 163 (2021). For a similar, if more equivocal, suggestion, see Cristina M. Rodríguez, Foreword: Regime Change, 135 Harv. L. Rev. 2, 32 (2021) (“[T]he Supreme Court’s burgeoning jurisprudence . . . has turned to the Bill of Rights, primarily the First Amendment, to limit social welfare and good-government regulation . . . .”); see also Linda Greenhouse, Justice on the Brink: The Death of Ruth Bader Ginsburg, the Rise of Amy Coney Barrett, and Twelve Months That Transformed the Supreme Court 224 (2021) (describing the case as a “potentially transformational development in the law of property rights . . . likely to hobble government land use regulation”). For a contrary view, see Julia D. Mahoney, Cedar Point Nursery and the End of the New Deal Settlement, 11 Brigham-Kanner Prop. Rts. J. 43, 64 (2022) (arguing that “Cedar Point represents an evolution, not a revolution, in the Court’s property rights jurisprudence” while celebrating the Court’s result and analysis). As it will become clear, I respectfully disagree with Professor Mahoney’s conclusions for reasons spelled out at length in this Article. ↑
  25. Sam Spiegelman & Gregory C. Sisk, Cedar Point: Lockean Property and the Search for a Lost Liberalism, 2020–21 Cato Sup. Ct. Rev. 165, 178–81 (2021) (talking of “the takings muddle”). ↑
  26. Cf. Cedar Point Nursery v. Hassid, 141 S. Ct. 2063, 2071 (2021) (“As John Adams tersely put it, ‘[p]roperty must be secured, or liberty cannot exist.’” (citation omitted)). ↑

  27. Jeremy Waldron, The Rule of Law and the Measure of Property 27 (2012) [hereinafter Waldron, Measure of Property] (doubting that “Locke’s account” of property yields a specific definition of the rule of law). ↑

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