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Monday, August 18, 2008
Boilerplate in Law Enforcement Contracts (Part One)
Boilerplate in commercial contracts (e.g., credit card agreements) has received significant academic attention. But I've been thinking about boilerplate in what could be called "law enforcement contracts": settlements with the SEC or deferred prosecution agreements with criminal prosecutors. What if we think about the use of boilerplate as a type of agency lawmaking?
The reasons to use standard language seem obvious. Electronic drafting lends itself to a cut-and-paste approach, which may be faster than reinventing the wheel. Also it makes sense to use model language that has been approved inside the organization or (more rarely) that has been tested externally, perhaps in court.
What is more interesting is to think of these provisions as a type of agency lawmaking - and an important one in a world in which the majority of matters are settled through exactly these types of agreements. Use of these terms strikes me as an ingenious use of limited resources, but also as potentially troubling because lawmaking like this avoids formal processes and puts pressure on the provisions' public availability and the agencies' internal processes approving the language.
One obvious objection to thinking of these agreements as "lawmaking" is that the agreement binds only those who sign it. But I'm not sure that's enough of an answer. At least in the SEC context, the speeches of the Commissioners are read like tea leaves. In other words, the sources of information about the conduct expected from those regulated and about the potential costs of violations are often informal and technically non-binding.
My next few posts will look at some of these issues and give examples of the type of provision I'm talking about. Meanwhile I'd be interested in your thoughts - Maybe the criminal context is so different from the civil SEC context that we shouldn't think of these contracts as comparable. Maybe contracts scholars have addressed law enforcement contracts already or have thought about boilerplate in some analogous situation. Maybe you have seen an example of a provision that puzzled or shocked you. Comments are welcome.
Posted by Verity Winship on August 18, 2008 at 09:14 AM | Permalink
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Comments
I take your point, but see at least some similarities when we get to deferred prosecution (or nonprosecution) agreements and the court's role in policing them. Yes, courts review the meaning of the law de novo in the criminal context, but the standard of review of deferred prosecution agreements is not as strict. It may be more stringent than the SEC, where courts defer to the agency's definition of "public interest." And, for the reasons you suggest, expansive DOJ provisions may be more troubling than agency provisions because they implicate executive power. Nonetheless, I think there is some convergence both in the court's role in these two contexts and in what these contracts often attempt to do: structural reform of corporations. (Brandon Garrett has a nice article on Structural Reform Litigation in the 2007 Virginia Law Review.)
Posted by: Verity Winship | Aug 18, 2008 10:08:29 AM
I think the difference with the criminal context is that the executive branch in the criminal justice system does not work in a zone of delegated discretion. The agency lawmaking model works when Congress has actually or by judicial construction delegated a zone of lawmaking authority to an executive agency. The idea is that the agency has become the decider, and the question is what relatively deferential checks should exist on that exercise of power.
In the criminal context, though, the model is different: It is the traditional model of limited executive power that predates the administrative state. In this setting, the executive receives no deference when it brings a legal action or reaches a legal decision because it has not been delegated any actual lawmaking power. So, for example, when DOJ decides to bring a criminal prosecution, the courts do not defer to DOJ on whether a crime was committed or what the law means; the meaning of the law is a de novo question of the courts, and the government has the burden of proving the elements of the crime beyond a reasonable doubt. So in my view, the two are pretty different.
Posted by: Orin Kerr | Aug 18, 2008 9:39:48 AM
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