Legal Methods II: Foundations of the Regulatory State: An Introduction

During the first semester of law school, tort and contract are at the center of the legal universe. This course starts with an observation that may therefore be confounding: in many areas of modern life, the common law system of tort and contract has been heavily supplemented, if not replaced, by statutes and regulations and complex administrative schemes. This course attempts to answer the question of why this social and legal event has occurred. Another way to think about this question is to see judicial enforcement of contract and institutions of tort law as a kind of regulatory system and to ask why this regulatory system has apparently been regarded as inadequate, to be replaced by another. Ultimately we have to ask whether the web of legislative, administrative, and judicial interactions that we think of as characterizing "the regulatory state" is a better regulatory system and, even if so, whether that regulatory system might be improved. Indeed, the idea of the “regulatory state” has been challenged by recent Supreme Court cases like West Virginia vs. EPA and Loper Bright Enterprises v. Raimondo as well as those who resist the idea of intrusive State conduct regulation. This course aims to examine normative justifications for the “regulatory state” as well as the various analytic tools employed by policy makers in devising particular regulatory regimes. Thus we will develop a regulatory tool kit that will include such ideas such as “moral hazard,” “adverse selection,” collective action problems, heuristic bias, the Coase theorem, and cost-benefit analysis. We will explore the uses and limits of markets and compare “market failure” with “government failure” in addressing specific regulatory problems, particularly issues that arise in the regulation of the workplace. The course also explores the political economy of regulation, asking whether “public interest” or “private interest” motives dominate in the production of regulatory regimes. We will develop an instrumentalist approach to law – the idea that lawyers are engaged in the design of institutions to achieve particular goals, particularly taking into account the incentives of the relevant parties and how particular elements of institutional design interact with those incentives. In this spirit, a long term contract is as much an “institution” (if governing many fewer people) as a specific regulatory program. Thus the course provides a useful background to a wide range of upper year courses, such as environmental law, corporations, land use planning, and social welfare law. This course has an intellectual history. Once Columbia had a mandatory second semester course called Foundations of the Regulatory State, which addressed these issues in three separate “modules,” Workplace Health and Safety, Environmental Law, and Healthcare. This year’s Legal Methods II course is based on the Workplace Health and Safety module of that course, with some modest updating. The passage of time has not eroded the centrality of these issues to the governance of a complex society and to the work of lawyers.