In Leegin Creative Leather Products v. PSKS, the Supreme Court was asked to review a multi-million-dollar judgment against a manufacturer of Brighton branded leather goods. The dispute arose after Leegin discovered that PSKS (d.b.a. Kay’s Kloset) was discounting the entire Brighton line by 20%, requested that Kay’s Kloset cease discounting, and stopped selling the retailer when its request was refused. The Court of Appeals affirmed the judgment, holding that it was bound by the holding in Dr. Miles. The Supreme Court took up the case “to determine whether vertical minimum resale price maintenance agreements should continue to be treated as per se unlawful.” The court was interested in revisiting Dr. Miles for a number of reasons including that, over time, favorable treatment of many price and non-price vertical restraints had eroded the holding, cases like Colgate had provided effective workarounds, and the modern differential treatment provided to vertical and horizontal agreements. But, more important, I think, was a well-developed economics-rooted metanarrative that undermined the reasoning of the Dr. Miles majority—and validated that of Holmes in dissent: “Minimum resale price maintenance can stimulate interbrand competition—the competition among manufacturers selling different brands of the same type of product—by reducing intrabrand competition—the competition among retailers selling the same brand. The promotion of interbrand competition is important because the primary purpose of the antitrust laws is to protect [this type of] competition.”
With this new explanatory scheme in place, it was short work for the court to declare “it is a flawed antitrust doctrine that serves the interests of lawyers—by creating legal distinctions that operate as traps for the unwary—more than the interests of consumers—by requiring manufacturers to choose second-best options to achieve sound business objectives.” It was even shorter work for the court to then overrule Dr. Miles and hold that vertical price fixing is to be evaluated under the rule of reason, which allows a defendant to justify its price restraints with difficult-to-overcome evidence of pro-competitive effects.
I offered this tortured 100-year history of vertical price fixing to problematize the notion that the interpretive-ethical issues attendant upon transactional counseling and litigation argumentation are different in kind. First, transactional interpretive strategies do get reviewed by courts and regulators, albeit at a second temporal order. For example, Colgate’s lawyers no doubt reviewed Dr. Miles, saw that it turned on the presence of an agreement, and advised Colgate that it might be possible to evade its holding by dictating prices and refusing to deal with non-compliant customers. And although that strategy does violence to the animating “spirit” of Dr. Miles, the Supreme Court endorsed it. Second, the background justification of a rule may itself be contested. That’s what happened in the space between Dr. Miles and Leegin. That is, the Dr. Miles majority believed that all vertical price fixing destroys competition and harms consumers; the Leegin majority believed that vertical price fixing can foster interbrand competition and benefit consumers. So it would seem that a lawyer has great latitude—even in a transactional setting—to advance positions that dodge a rule and offend its background justification. But are there limits to lawyerly creativity?
Certainly, there are constraints, but they exist along a continuum and have been devised by members of our profession. Take four constitutional examples. First, every state gets two senators. There’s not much room for argument there. And that number was probably chosen because it’s an objective number—not one standing for something else. So that rule can’t be easily interpreted away. One can imagine a scenario in which the rule no longer makes sense (see, e.g., Lon Fuller’s hypothetical in which vast areas of the U.S. have become uninhabitable because of some disaster). But breaching the two-senator standard would be defended on some ground like necessity, not meaning. The president must be 35 is not objective in the same way because 35 is a proxy for something else: maturity, experience, wisdom, or what have you. So could a super-mature 34-year-old be president? Probably not, but one could mount an argument cognizable as an interpretive legal argument that a young candidate who bears all the hallmarks of what the shorthand is attempting to capture should be eligible. That argument, weighed down by tradition, administrative convenience, and so forth, would likely fail; nonetheless, it might ultimately gain traction and spur a movement to amend the Constitution. That the president must be a “natural born” citizen presents a factual interpretive dilemma at the margins. Is someone born in a territory eligible? A protectorate? A foreign military base? An embassy? And so on. Such a case comes up more often than one might think, and there’s plenty of room to argue when it does. Finally, an open-textured provision like “due process” presents a wide interpretive field, as the reports of constitutional litigation bear out.
So how does one draw the boundaries of permissible legal argumentation? First, as I’ve argued elsewhere, Stanley Fish’s notion of “interpretive communities” and Kent Greenawalt’s modest definition of legal “objectivity”—both of which bear some resemblance to C.P. Snow’s definition of a professional “culture”—are instructive. For Fish (initially writing in the context of literary theory), a reader reads “as a member of a community whose assumptions about literature determine the kind of attention he pays and the kind of literature ‘he’ ‘makes.’” Cast this way, interpretive strategies proceed not from the reader per ipsum “but from the interpretive community of which he is a member; they are, in effect, community property, and insofar as they at once enable and limit the operations of his consciousness, he is too.” Greenawalt similarly posits (in a specifically legal context) that many legal questions have determinate answers, in part, because those answers “would be arrived at by virtually all those with an understanding of the legal system.” This is to say, I think, that a (properly defined) community of lawyers develops a shared sense of what is cognizable as a legal argument or—at least—what is reasonable in a legal argument. In this sense, legal interpretation exhibits a type of objectivity. It’s not objectivity in a scientific sense because it’s the result of professional conventions, not a natural law, but it’s the result of great intersubjective agreement across a relevant community. Turning back to the example of abusive tax shelters, I remember that a senior tax partner in my then-firm routinely opined that the tax opinions our competitor firm was issuing were—though lucrative—illegal. Time proved him right. The point here is that a community consensus as to the reasonableness of any given interpretation should serve as both a curb on and guide as to the propriety of legal advice and argumentation. But what of a situation in which the law is “wrong” for some perceived reason? Leegin again proves instructive.
Retrospective laws are always an affront (yet sometimes a necessary one) to the rule of law as it is traditionally articulated. The complaint is not just that a reversal in law undermines the law’s stability, but that it’s unfair to participants standing on one side of the decision line rather than another. The latter point is easy to see: The Leegin plaintiff had a nearly $4 million judgment snatched out from under its feet that rested on (what had been for 100 years) solid legal ground. The former point entails a related, yet broader, set of concerns. Here, too, Leegin is representative. First, there’s a consequentialist debate as to the Dr. Miles rule as it existed and was applied in 2007. For the Leegin majority, the Dr. Miles rule—which, again, deems all vertical price-fixing agreements per se illegal—captures and criminalizes agreements that don’t actually harm competition (the “false positives” problem). For the Leegin dissent, the Dr. Miles rule—given its bright-line prohibition—serves the ends of consistency, fairness, and administrative convenience. Each side concedes that the other’s is not meritless but that, on balance, the rule should be one way rather than the other. That Leegin was decided on a 5-4 vote underscores how much the case came down to a difference of opinion.
Second, there’s a next-order argument speculating as to the consequences of replacing the Dr. Miles rule with something else. The Leegin majority found that any fallout would be slight: “Reliance interests do not require us to reaffirm Dr. Miles. The reliance interests here … cannot justify an inefficient rule, especially because the narrowness of the rule has allowed manufacturers to set minimum resale prices in other ways.” The dissent disagreed: “The fact that a case involves property rights or contract rights, where reliance interests are involved, argues against overruling. This case involves contract rights and perhaps property rights (consider shopping malls). And there has been considerable reliance upon the per se rule. Moreover, whole sectors of the economy have come to rely upon the per se rule.”
A theoretical point is at stake in these opposing positions as well—namely, did the Dr. Miles majority make a “mistake”?—is the Leegin dissent “wrong”?—or vice versa on both counts? MacCormick suggests that “in highly problematic cases, differences of judgement and opinion can persist. Partly, this is imputable to the relevance of consequentialist argument, where there may be differences of apprehension concerning what may happen if the precedent is followed.” In Leegin, as we’ve already noted, the competing consequentialist arguments were resolved largely on the basis of the economic metanarrative that seized antitrust jurisprudence after the 1970s. That metanarrative may itself change and with it swaths of antitrust precedent, but for now the act of deciding has established a new legal truth—namely, that vertical price fixing is no longer per se illegal under section 1 of the Sherman Antitrust Act. (There is still lingering disagreement, though—vertical price fixing is still per se illegal under a handful of state laws.)
Ultimately, Dr. Miles, Leegin, and a host of opinions in between stand to illustrate Robert Alexy’s position that—as to some questions—many “discursively possible” answers may exist. When faced with such a case, it may be that multiple iterations of legal and practical argumentation fail to yield a single, discernable “right” answer. We’ll finish up this line of thinking next time with a favorite literary example.
Can We Tame the Interpretive Tiger?
The sort of interpretative and theoretical dispute on display in 5-4 Supreme Court decisions calls to mind an old debate over the meaning of William Blake’s “The Tygre”:
“Tyger Tyger, burning bright,
In the forests of the night;
What immortal hand or eye,
Could frame thy fearful symmetry?
In what distant deeps or skies.
Burnt the fire of thine eyes?
On what wings dare he aspire?
What the hand, dare seize the fire?
And what shoulder, & what art,
Could twist the sinews of thy heart?
And when thy heart began to beat,
What dread hand? & what dread feet?
What the hammer? what the chain,
In what furnace was thy brain?
What the anvil? what dread grasp,
Dare its deadly terrors clasp!
When the stars threw down their spears
And water’d heaven with their tears:
Did he smile his work to see?
Did he who made the Lamb make thee?
Tyger Tyger burning bright,
In the forests of the night:
What immortal hand or eye,
Dare frame thy fearful symmetry?”
In a pair of famous critical essays that Stanley Fish later squared off, Kathleen Raine and E.D. Hirsch reached diametrically opposed interpretive conclusions. For Raine, the question posed in the last line of the penultimate stanza “is beyond all possible doubt, No.” Her analysis turns, in part, on her belief that Blake always used the word “forest” to “refer to the natural, ‘fallen’ world.” Hirsh, to the contrary, sees “holiness” in the tiger, its violence—and that of the world—transfigured in the “tall straight forms” of the forest, which are replicated in the “orderliness of the tiger’s stripes.” We’re left with rival interpretations, each appealing to the same word in the text as confirmation. Under the law of the excluded middle, Fish is surely correct that “Clearly they cannot both be right, but just as clearly there is no basis for deciding between them.” Further appeals to the text won’t get us anywhere “because the text has become an extension of the interpretive disagreement that divides them; and, in fact the text as it is variously characterized is a consequence of the interpretation for which it is supposedly evidence.” We’re thus left with a poem that’s open to multiple viable interpretations. This doesn’t mean that anything goes—it’s not, for example, “an allegory of the digestive processes.” But it confirms that a great work of art—or any complicated or open text—can generate a multiplicity of meanings that conform to the predilections of the members of particular interpretive communities or sub-communities.
(To the extent anyone is curious, I’ve always been interested in art history, so I read the poem in the context of Blake’s illustrated version of the poem. There, the tiger doesn’t look particularly fearful—it looks like a child’s toy and the stripes aren’t prominent. So my own interpretation is colored by those facts, and I land on neither Raine’s nor Hirsch’s interpretation. Instead, I think the poem (especially when supplemented with the illustration) reveals a paradox within creation stories—namely, that for Blake all explanatory schemes—be they Christian orthodoxy, Swedenborgian correspondences, or something else—are riddled with flaws and inconsistencies.)
The same holds in legal interpretation: e.g., “originalists” and “living constitutionalists” can reasonably and in good faith argue that “due process” or “equal protection” mean different things. In law and society, though, we order ourselves around rules, so not all reasonable interpretations—because they carry normative weight—can stand at once. There may be no choice, then, other than to make and follow an authoritative decision made on a divided vote. But, Neil MacCormick remarks, “this is not to say that such an opinion is for all purposes self-authenticating and rationally incorrigible.” This is to say that legal decisions (judicial or not) must be made in the context of rational legal argumentation and attendant reasonableness. For as MacCormick concludes, “Within that scope, it is everyone’s right to develop the best argument they can on any problem … That right is also grounded in respect for the rule of law. Obfuscating tactics beyond these constraints can be and are from time to time utilized by lawyers. That is not within the legitimate rhetoric of their profession, but is a betrayal of it.” To my mind, lawyers staying within the lanes MacCormick stakes out—which are really just the “reasonableness” lanes of their interpretive communities—will avoid the worries raised in the wake of lawyer-facilitated debacles like Enron.
In thinking about Enron-type scandals, I think Cynthia Cooper is right to draw distinctions among lawyers who knowingly and willingly participate in illegal conduct, lawyers who give legitimate advice in transactions that nonetheless produce bad outcomes, and lawyers who exhibit a sort of willful blindness to what their clients are up to. It’s the third group that presents the most insidious assault on professionalism as we’ve discussed the term. These “see no evil” lawyers must surely know that—to keep with the metaphor from the text above—they’re straying outside the lanes of what their interpretive communities see as reasonable. This is to say that it’s one thing to in good faith counsel a client to structure a transaction so as to avoid liability for vertical price fixing and quite another to assist a client in avoiding laws designed to make full disclosure of the liabilities of a public company.
In the end, there’s a related consequentialist point to be made. That is, counseling a client (even aggressively but without clear illegality) on how to structure a distribution plan so as to avoid antitrust liability seems fair game to me, so long as the client is adequately informed of any risks. The same can be said with respect to structuring transactions so as to minimize tax liabilities—again, assuming that the client is informed and no bogus transactions are in the mix. Even if the antitrust or tax advice is later attacked, any harm is almost always circumscribed—the client may have to refund its customers or pay a tax penalty. But helping a client structure phantom transactions, skirt pollution regulations, or facilitate torture seems different to me because the negative consequences of the legal work are far out of proportion to any benefit (e.g., Enron’s employees lost their jobs and retirement accounts, shareholders lost their stakes, etc.). I doubt that the accountants and lawyers advising Enron had any conception of the magnitude of the harm that could flow from putting a bill on a dog and calling it a duck. But they did, and I think they did so because self-interest brought about a catastrophic failure of imagination.
Reprinted with permission from © ALM Media Properties LLC. All rights reserved.
