Measuring the Effects of Legal Precedent in U.S. Federal ...users.nber.org/~dlchen/papers/Judicial_Compliance_in_District_Courts_slides.pdf · Measuring the Effects of Legal Precedent

Measuring the Effects of Legal Precedent inU.S. Federal Courts

Daniel Chen 1 Jens Frankenreiter 2 Susan Yeh 3

1Toulouse Institute for Advanced Study

2ETH Zurich & Harvard Law School

3George Mason University

ALEA Annual Meeting 2015May 15, 2015

Introduction and related literature

Contents

1 Introduction and related literature

2 Research design

3 Empirical analysis

4 Extension 1 – Legalistic motivation?

5 Extension 2 – Other effects and extension of dataset to 2000-2012

6 Discussion/Conclusion

Chen/Frankenreiter/Yeh Effects of precedent AELA, May 15, 2015 2 / 57


Introduction

I How do judges at lower level courts adjust their decision-making to thecreation of new legal precedent?

I “Common sense approach”: Judges follow new rule set by precedent anddecide a subset of cases different than before

I Consistent with “legalistic” (traditional) concepts of judicial decision-making– legal reasoning as the main determinant of judges’ decisions

I Less clear in “realistic” concepts of judicial decision-making– legal reasoning (more or less) irrelevant. However: obedience to precedencemight be caused by strategic considerations



Introduction







Introduction







Introduction







Introduction, contd...

I Measuring legal change is challenging!

I Priest and Klein (1984): it is not sufficient to compare success ratesbefore and after the change in law occurred

I More recent theoretical contributions challenge the selection hypothesis(Klerman/Lee 2013)

I However, inferences from litigated cases can be only drawn under certain,rather strong, assumptions (Gelbach 2014)




I Measuring legal change is challenging!I Priest and Klein (1984): it is not sufficient to compare success rates

before and after the change in law occurred







before and after the change in law occurredI Most legal disputes are not litigated, most litigated disputes are not resolved by

trial

I Parties adjust their expectations to a change in law and select differentdisputes for litigation







before and after the change in law occurredI Most legal disputes are not litigated, most litigated disputes are not resolved by

trialI Parties adjust their expectations to a change in law and select different

disputes for litigation







before and after the change in law occurredI More recent theoretical contributions challenge the selection hypothesis

(Klerman/Lee 2013)






before and after the change in law occurredI More recent theoretical contributions challenge the selection hypothesis

(Klerman/Lee 2013)I However, inferences from litigated cases can be only drawn under certain,

rather strong, assumptions (Gelbach 2014)



Empirical strategy

I Examine the effect of the universe of decisions issued by the courts ofappeals related to veil piercing claims on the proceedings at the districtcourt level in which veil piercing claims are raised

Timing of District Court cases and Circuit Court judgments for D.Nev.

Time

Dis

tric

t Cou

rt C

ases

2001 2002 2003 2004

Circuit Court judgment affirming merits of PCV claimCircuit Court judgment denying merits of PCV claimOther Circuit Court judgment pro PCVOther Circuit Court judgment anti PCVDistrict Court case terminated by judgmentDistrict Court case − other terminationDistrict Court judgment pro PCVDistrict Court judgment anti PCV

(1) Consider only cases pending at the time of the circuit court decisions(2) Instrument for the direction of the appellate case



Empirical strategy



I In order to hold the case sample constant, we consider only cases pendingat the time of the circuit court decisions. In doing so, we avoid thefundamental selection problem first described by Priest/Klein (1984) (the“selection of disputes for litigation”).

I Selection effects caused by changes in the tried disputes (the “selection oflitigated disputes for trial”) constitute a potential limitation to this study.However, such selection should counteract, and not reinforce, any impactof a change in decision standards on success rates. Therefore, it seemsreasonable to interpret our findings as lower bounds.



Empirical strategy



I We exploit the idiosyncratic variation of the assignment of judges at thecourts of appeals with personal characteristics which predict their votingbehavior in order to instrument for the direction of the appellate case.This allows us to isolate the causal effect of circuit court decisions ondecisions of district court judges.


Research design

Contents


2 Research design






Research design

The U.S. federal court system

I The U.S. legal system includes both state courts and U.S. federal courts

I The federal courts include three levels (Supreme Court, circuit courts,district courts)

I 94 district courts (+ 3 territorial courts) generally act as trial courts or ascourts of appeals for specialized courts such as bankruptcy courts

I 13 circuit courts form the intermediate level of the federal judiciary. Theyoperate under a system of mandatory review which means they must hear allappeals of right from the lower courts.


Research design


I The U.S. legal system includes both state courts and U.S. federal courtsI The federal courts include three levels (Supreme Court, circuit courts,

district courts)

I 94 district courts (+ 3 territorial courts) generally act as trial courts or ascourts of appeals for specialized courts such as bankruptcy courts

I 13 circuit courts form the intermediate level of the federal judiciary. Theyoperate under a system of mandatory review which means they must hear allappeals of right from the lower courts.


Research design


I The U.S. legal system includes both state courts and U.S. federal courtsI The federal courts include three levels (Supreme Court, circuit courts,

district courts)I 94 district courts (+ 3 territorial courts) generally act as trial courts or as

courts of appeals for specialized courts such as bankruptcy courtsI 13 circuit courts form the intermediate level of the federal judiciary. They

operate under a system of mandatory review which means they must hear allappeals of right from the lower courts.


Research design

The U.S. federal court system, contd...


Research design


I Cases are effectively randomly assigned to 1 (district court) respectively 3(circuit court) judges.

I Personal characteristics of circuit court judges (most prominently, the partyof the president who appointed the judge) have been shown to be correlatedwith case outcomes (Sunstein et al, 1996)


Research design


I Cases are effectively randomly assigned to 1 (district court) respectively 3(circuit court) judges.

I Personal characteristics of circuit court judges (most prominently, the partyof the president who appointed the judge) have been shown to be correlatedwith case outcomes (Sunstein et al, 1996)


Research design

Piercing the corporate veil

I Piercing the corporate veil (PCV) refers to a decision to hold theshareholder/mother company liable for the duties of acorporation/subsidiary

I PCV is allegedly the most litigated issue in U.S. corporate law (Thompson,1991)

I It occurs in a wide range of different types of legal conflicts (see Boydand Hoffman, 2010)


Research design



I In US corporate law, usually a corporation is solely responsible for its duties

I In exceptional circumstances, a court may pierce this corporate veil and extendthe obligations to its shareholders




Research design



I In US corporate law, usually a corporation is solely responsible for its dutiesI In exceptional circumstances, a court may pierce this corporate veil and extend

the obligations to its shareholders




Research design






Research design






Research design

Data - four different databases combined

I For the identification ofdistrict court casesrelated to PCV, we used theWestlaw pleadingsdatabase (search string““alter ego liability” or pier!/s corpor! /s veil or “unity ofinterest” or (corpor! /s(facade or shell or sham orundercapitalized conduit))”

Data for D.Nev.

Time

Dis

tric

t Cou

rt C

ases

2001 2002 2003 2004


Research design


I For each identified districtcourt case, we obtaineddetailed information oncase outcomes from the AOCivil TerminationsDatabase

Data for D.Nev.

Time

Dis

tric

t Cou

rt C

ases

●

●

●

●

●

●

2001 2002 2003 2004


Research design


I We conducted a search onLexis for PCV-relatedkeywords in order to obtainall PCV cases litigatedbefore the circuit courts

Data for D.Nev.

Time

Dis

tric

t Cou

rt C

ases

●

●

●

●

●

●

2001 2002 2003 2004


Research design


I We manually codedinformation on caseoutcome and judgesinvolved and linked theinformation to databasescontaining judgecharacteristics for all UScircuit court judges

Data for D.Nev.

Time

Dis

tric

t Cou

rt C

ases

●

●

●

●

●

●

2001 2002 2003 2004


Research design

Data - four different databases combined, contd...

I We obtain a dataset identifying for each district court case which circuitcourt cases were decided while the case was pending


Time

Dis

tric

t Cou

rt C

ases

2001 2002 2003 2004



Research design

Data - overview (1): Distribution of cases across districtcourts

Number of judgmentsNumber of other cases

0 20 40 60 80 100


Research design

Data - overview (2): Numbers of circuit court decisionsper district court case (all circuit court cases)


Research design

Data - overview (3): Numbers of circuit court decisionsper district court case (on the merits only)


Empirical analysis

Contents


2 Research design






Empirical analysis

Specification

I Specifications:

P(Yi,y,d,c = 1|X) = β0 + β1casesi,c + β2lawi,c + β3dd + β4dy + εi

lawi,c = π0 + π1casesi,c + π2chari,c + π3dd + π4dy + εi

casesi,c count variable of circuit court cases while district court case pending

lawi,c count variable of pro-PCV circuit court cases while district court case pending

dd and dy district and year fix effects

chari,c vector of judge characteristics

I We use lassoiv (Belloni et al., 2012) to identify the optimal set ofinstruments from a multitude of judge characteristics and interactions.


Empirical analysis

Specification

I Specifications:

P(Yi,y,d,c = 1|X) = β0 + β1casesi,c + β2lawi,c + β3dd + β4dy + εi

lawi,c = π0 + π1casesi,c + π2chari,c + π3dd + π4dy + εi

casesi,c count variable of circuit court cases while district court case pending

lawi,c count variable of pro-PCV circuit court cases while district court case pending

dd and dy district and year fix effects

chari,c vector of judge characteristics

I We use lassoiv (Belloni et al., 2012) to identify the optimal set ofinstruments from a multitude of judge characteristics and interactions.


Empirical analysis

Regression results – Regression estimates

Outcome: Pro-plaintiff district court judgmentall circuit court judgments judgments on merits only

(1) (3) (4) (6)OLS LIML OLS LIML

Cases -0.0869 -0.110 -0.0905 -0.115(0.350) (0.318) (0.161) (0.140)

Law 0.291 0.406* 0.297*** 0.371**(0.050) (0.033) (0.000) (0.006)

_cons 0.934** 0.784* 1.140*** 1.094***(0.003) (0.042) (0.000) (0.000)

F (First stage) - 139.25 - 334.67N 78 78 78 78

Notes: p-values in parentheses. Heteroskedasticity-robust standard errors clustered at the circuit level.IV estimates: p-values based on small sample t-statistics. District and Year F.E. included. Dependentvariable: Dummy indicating whether district court decided at least partly in favor of claimant.Observation level: District court judgment. * p < 0.05, ** p < 0.01, *** p < 0.001.


Extension 1 – Legalistic motivation?

Contents


2 Research design







Does this effect indicate a legalistic motivation in judges’decision-making?

I District court judges react to changes in the law that are caused by “outlierpanels.” Absent any binding force of precedent (either on the circuit courtlevel or on the district court level), this should not affect jugdes’expectations in a purely attitudinalist world.

I Still, it it unclear whether district court judges are motivated by legalconsiderations, or merely by reversal aversion.

I We investigate this further by estimating the effects for circuit courtdecisions in the same legal area and in different legal areas:

1. Common Law2. Bankruptcy Law3. ERISA4. Other federal statutory law (including CERCLA)

















Regression results – Regression estimates (2)

Outcome: Pro-plaintiff district court judgmentall circuit court judgments judgments on merits only

(1) (3) (4) (6)OLS LIML OLS LIML

Cases (same area) -0.225 -0.142 -0.078 -0.065(0.089) (0.219) (0.453) (0.466)

Cases (different area) -0.066 -0.145 -0.139 -0.190(0.541) (0.140) (0.053) (0.055)

Law (same area) 0.675 0.733 0.845 0.795*(0.124) (0.268) (0.086) (0.045)

Law (different area) 0.186 0.401 0.267** 0.399**(0.263) (0.194) (0.007) (0.011)

_cons 0.784* 0.565 1.034*** 0.965***(0.049) (0.164) (0.000) (0.000)

N 78 78 78 78



Extension 2 – Other effects and extension of dataset to 2000-2012

Contents


2 Research design







Effect of circuit court judgments on settlement, damageawards etc...

I Beside, we are also investigating the effect of circuit court case outcomeson

I the amount of damages awardedI the probability of a case to settle

I This should allow us to get a better understanding of potential selectioneffects occurring during trial



Effect of circuit court judgments on settlement, damageawards etc...

I Beside, we are also investigating the effect of circuit court case outcomeson

I the amount of damages awardedI the probability of a case to settle

I This should allow us to get a better understanding of potential selectioneffects occurring during trial



Extension of analysis to 2000-2012

I At the moment, we are working on extending the analysis to 2012

I Complicated by different data structure in AOC database for 2005-2012and potential coding errors

I So far, we managed to match 2183 district pleadings (out of 3274) to casesin the AOC database

I Regression results are blurred and even change direction




I At the moment, we are working on extending the analysis to 2012I Complicated by different data structure in AOC database for 2005-2012

and potential coding errors

I So far, we managed to match 2183 district pleadings (out of 3274) to casesin the AOC database






and potential coding errorsI So far, we managed to match 2183 district pleadings (out of 3274) to cases

in the AOC database






and potential coding errorsI So far, we managed to match 2183 district pleadings (out of 3274) to cases

in the AOC databaseI Regression results are blurred and even change direction


Discussion/Conclusion

Contents


2 Research design







Wrap-up and discussion

I First attempt to directly estimate the effect of the creation of newprecedent on district court decision-making

I By limiting our analysis to cases that were initiated before the appellatedecision, we control for selection into litigation.

I Random case assignment and judge characteristics with predictive powerallow us to make a plausible claim about a causal relationship betweencircuit court judgments and the decisions of district court judges





I Using data for 2000-2004, our results suggest that new precedent has a strongeffect on district court judges’ decision standards

I Results are stronger when we focus on decisions in the same area of lawI Extending the data to 2012, our results get blurred or even change direction








I Results are stronger when we focus on decisions in the same area of law

I Extending the data to 2012, our results get blurred or even change direction








I Results are stronger when we focus on decisions in the same area of lawI Extending the data to 2012, our results get blurred or even change direction

















Thank you! Feedback very welcome!

[email protected]://nber.org/ dlchen/

[email protected]/people/frankenreiter

[email protected]/faculty/directory/fulltime/yeh_susan


Annex

Clarification

I Change of law = changes to statutory law, creation of new legal precedentI Legal change / change of decision standard = change to an imagined line

separating those cases that are decided in a certain way from those that arenot

−1.0 −0.5 0.0 0.5 1.0

Case distribution and decision standard

Case quality

Den

sity

Decision standard y*


Annex

Related literature

1. Literature on judicial compliance in hierarchical systems

2. (Scarce) literature on isolating the effect of legal motivations

3. (Mostly theoretical) literature on dispute selection

4. Literature on measuring legal change


Annex

Related literature

1. Literature on judicial compliance in hierarchical systemsI Changes in case outcomes after cases were remanded on appeal: Boyd (2009)

I Constraining effect of diverging preferences on the decision-making of lowercourts: Randazzo (2008); Songer, Segal and Cameron (1994)

I Changes in the ideology of the enacting court and the effect on the importanceof precedents to lower courts: Westerland et al (2010)





Annex

Related literature

1. Literature on judicial compliance in hierarchical systemsI Changes in case outcomes after cases were remanded on appeal: Boyd (2009)I Constraining effect of diverging preferences on the decision-making of lower

courts: Randazzo (2008); Songer, Segal and Cameron (1994)

I Changes in the ideology of the enacting court and the effect on the importanceof precedents to lower courts: Westerland et al (2010)





Annex

Related literature

1. Literature on judicial compliance in hierarchical systemsI Changes in case outcomes after cases were remanded on appeal: Boyd (2009)I Constraining effect of diverging preferences on the decision-making of lower

courts: Randazzo (2008); Songer, Segal and Cameron (1994)I Changes in the ideology of the enacting court and the effect on the importance

of precedents to lower courts: Westerland et al (2010)





Annex

Related literature






Annex

Related literature

1. Literature on judicial compliance in hierarchical systems2. (Scarce) literature on isolating the effect of legal motivations

I Individual Supreme Court Justices and the effect of precedent: Spaeth andSegal (2001)

I Attempts to differentiate between legal and policy motivations: Cross (2005),Gilbert 2011, Fishman 2014




Annex

Related literature

1. Literature on judicial compliance in hierarchical systems2. (Scarce) literature on isolating the effect of legal motivations

I Individual Supreme Court Justices and the effect of precedent: Spaeth andSegal (2001)

I Attempts to differentiate between legal and policy motivations: Cross (2005),Gilbert 2011, Fishman 2014




Annex

Related literature






Annex

Related literature


2. (Scarce) literature on isolating the effect of legal motivations3. (Mostly theoretical) literature on dispute selection

I “Divergent expectation” (DE) models of dispute selection: Priest and Klein(1984), Waldfogel (1995), Hylton/Lin (2012), Gelbach (2014)

I “Asymmetric information” (AI) models of dispute selection: Bebchuk (1984),Shavell (1996)

I Empirical investigation into the effect of briefs and interim rulings on settlement:Boyd/Hoffman (2012)



Annex

Related literature








Annex

Related literature








Annex

Related literature






Annex

Related literature



3. (Mostly theoretical) literature on dispute selection4. Literature on measuring legal change

I Exploiting uncertainty created by legal change: Priest (1987)

I Holding constant the case sample by focussing on pending cases andconsidering selection effects: Hubbard (2012)


Annex

Related literature



3. (Mostly theoretical) literature on dispute selection4. Literature on measuring legal change

I Exploiting uncertainty created by legal change: Priest (1987)I Holding constant the case sample by focussing on pending cases and

considering selection effects: Hubbard (2012)


Annex

Summary statistics (2000-2004)

Min. 1st Qu. Median Mean 3rd Qu. Max.

All cases (N=425)

Days pending 1.00 124.00 237.00 316.10 412.00 1399.00Termination by judgment 0.00 0.00 0.00 0.18 0.00 1.00Judgment pro plaintiff 0.00 0.00 0.00 0.12 0.00 1.00# CC judgm. while case pending 0.00 0.00 1.00 1.65 2.00 12.00- of which pro PCV 0.00 0.00 0.00 0.46 1.00 5.00- of which % pro PCV 0.00 0.00 50.00 35.20 50.00 100.00# CC judgments on the merits 0.00 0.00 1.00 1.43 2.00 12.00- of which pro PCV 0.00 0.00 0.00 0.44 1.00 5.00# CC judgments reversing 0.00 0.00 0.00 0.45 1.00 5.00- of which pro PCV 0.00 0.00 0.00 0.14 0.00 2.00

Judgments only (N=78)

Days pending 13.00 144.00 263.50 340.40 479.00 1243.00Termination by judgment 1.00 1.00 1.00 1.00 1.00 1.00Judgment pro plaintiff 0.00 0.00 1.00 0.68 1.00 1.00# CC judgm. while case pending 0.00 0.00 1.00 1.68 2.75 8.00- of which pro PCV 0.00 0.00 0.00 0.37 0.75 4.00- of which % pro PCV 0.00 0.00 33.33 29.46 50.00 100.00# CC judgments on the merits 0.00 0.00 1.00 1.42 2.00 8.00- of which pro PCV 0.00 0.00 0.00 0.33 0.00 4.00# CC judgments reversing 0.00 0.00 0.00 0.68 1.00 4.00- of which pro PCV 0.00 0.00 0.00 0.18 0.00 2.00


Annex

Summary statistics (2000-2012)

Obs Mean Std. Dev. Min Max Median

All cases (N=2166)

Days pending 2166 458.815 442.94 0 3221 326.5Termination by judgment 2166 .228 .42 0 1 0Judgment pro plaintiff 2166 .175 .38 0 1 0# circuit judgments while case pending 2166 2.007 3.114 0 31 1- of which pro PCV 2166 .922 1.646 0 15 0# circuit judgments on merit 2166 1.555 2.494 0 23 1- of which pro PCV 2166 .805 1.596 0 15 0# circuit judgments reversing 2166 .426 .885 0 6 0- of which pro PCV 2166 .212 .58 0 5 0

Judgments only (N=494)

Days pending 494 564.265 541.707 20 3188 387.5Termination by judgment 494 1 0 1 1 1Judgment pro plaintiff 494 .765 .424 0 1 1# circuit judgments while case pending 494 2.719 4.286 0 31 1- of which pro-plaintiff PCV 494 1.316 2.326 0 15 1# circuit judgments on merit 494 2.095 3.353 0 23 1- of which pro-plaintiff PCV 494 1.194 2.297 0 15 0# circuit judgments reversing 494 .615 1.087 0 6 0- of which pro-plaintiff PCV 494 .308 .702 0 5 0


Annex

Timing of case resolution

0 500 1000 1500

0.00

000.

0005

0.00

100.

0015

0.00

200.

0025

Number of days pending. N = 425 (all cases) / 78 (judgment) / 154 (settlement)

Den

sity

All proceedingsProceedings resolved by judgmentProceedings resolved by settlement


Annex

Regression results – First stage OLS regression2000-2004

Outcome: # pro-PCV judgmentsby the circuit court

all judgments on merits only

(1) (2) (3) (4)

Cases 0.115 0.164 0.0948 0.101(0.426) (0.263) (0.597) (0.599)

# of democrat judges in panels 0.141* 0.177(0.039) (0.072)

# of panels with 1 democrat judge -0.0984 0.0968(0.656) (0.639)

# of panels with 2 democrat judges 0.436* 0.374*(0.026) (0.018)

# of panels with 3 democrat judges 0.0270 -0.0301(0.948) (0.868)

_cons 1.041*** 1.065*** 0.269 0.259(0.000) (0.000) (0.471) (0.439)

F-statistics of instruments 5.52* 26.11*** 3.97 8.59**N 78 78 78 78

p-values in parentheses. Standard errors clustered at the circuit level. Dependent variable: countvariable for the number of pro-PCV decisions by the circuit courts.* p < 0.05, ** p < 0.01, *** p < 0.001Chen/Frankenreiter/Yeh Effects of precedent AELA, May 15, 2015 33 / 57

Annex


Outcome: Pro-plaintiff district court judgmentall appellate judgments appellate judgments on merits only

(1) (2) (3) (4) (5) (6)OLS LIML 1 LIML 2 OLS LIML 1 LIML 2

Cases -0.0869 -0.123 -0.110 -0.0905 -0.186** -0.115(0.350) (0.208) (0.318) (0.161) (0.001) (0.140)

pro − PCV 0.291 0.562 0.406* 0.297*** 0.578** 0.371**(0.050) (0.087) (0.033) (0.000) (0.002) (0.006)

_cons 0.934** 0.580 0.784* 1.140*** 0.964*** 1.094***(0.003) (0.276) (0.042) (0.000) (0.000) (0.000)

F (First stage) - 26.11 139.25 - 8.59 334.67N 78 78 78 78 78 78



Annex




Cases (same area) -0.143 -0.225 -0.142 -0.078 -0.086 -0.065(0.089) (0.148) (0.219) (0.453) (0.496) (0.466)

Cases (different area) -0.066 -0.110 -0.145 -0.139 -0.188 -0.190(0.541) (0.459) (0.140) (0.053) (0.158) (0.055)

Law (same area) 0.675 1.221 0.733 0.845 0.961 0.795*(0.124) (0.118) (0.268) (0.086) (0.078) (0.045)

Law (different area) 0.186 0.254 0.401 0.267** 0.374 0.399**(0.263) (0.424) (0.194) (0.007) (0.202) (0.011)

_cons 0.784* 0.392 0.565 1.034*** 0.953*** 0.965***(0.049) (0.526) (0.164) (0.000) (0.000) (0.000)

N 78 78 78 78 78 78



Annex

Regression results – First stage OLS regression2000-2012

Outcome: Number of pro-PCVappellate court judgments

all judgments on merits only

(1) (2) (3) (4)

# PCV cases 0.466*** 0.297** 0.668** 0.356*(0.000) (0.008) (0.006) (0.049)

# of Democrat judges on panels 0.0241 -0.0532(0.774) (0.703)

# of panels with 1+ Democrat judge 0.314* 0.500*(0.037) (0.010)

# of panels with 2+ Democrat judges -0.151 -0.515**(0.401) (0.007)

# of panels with 3 Democrat judges -0.0818 0.0556(0.641) (0.696)

Constant 2.090*** 2.107*** 1.102** 0.644(0.000) (0.000) (0.003) (0.055)

F-statistics of instruments 0.087 2.165 0.153 7.104***N 495 495 495 495

Notes: Standard errors in parentheses. Heteroskedasticity-robust standard errors. clustered at the circuit level.District and Year F.E. included. Dependent variable: count variable for the number of pro-PCV decisionsby the circuit courts. * p < 0.05, ** p < 0.01, *** p < 0.001


Annex

Regression results – Regression estimates



Cases -0.002 -0.020 0.057+ 0.005 0.039 -0.017(0.913) (0.828) (0.091) (0.845) (0.482) (0.596)

pro − PCV 0.002 -0.043 -0.117+ -0.010 0.066 -0.029(0.963) (0.811) (0.074) (0.784) (0.434) (0.506)

_cons 1.067* 1.160* 1.313** 1.079** 1.139** 1.099**(0.000) (0.006) (0.000) (0.000) (0.000) (0.000)

F (First stage) - 2.165 7.914 - 7.104 163.550N 495 495 495 495 495 495

Notes: Standard errors in parentheses. Heteroskedasticity-robust standard errors clustered at the circuit level.IV estimates: p-values based on small sample t-statistics. District and Year F.E. included. Dependentvariable: Dummy indicating whether district court decided at least partly in favor of claimant.Instruments in cols. 2 and 5: Number of panels with 1+, 2+, 3 Democrat appointees.LASSO instrument in col 3: Number of panels with 2+ Jewish former law professors.LASSO instrument in col 6: Number of panels with 1+ Catholic former federal prosecutor.Observation level: District court judgment. + p < 0.10, * p < 0.05, ** p < 0.01.


Annex

Possible selection effects

I Although we evaluate the impact of circuit court judgments on ongoingproceedings only, we still have to take into account possible selectioneffects

I Litigants might not only select different cases for litigation, but also selectdifferent cases for trial

I Does this lead to biased results?I Although we can not fully rule out any selection effects, both theory and the

data suggest that the observed effect on district court judges is not causedby selection effects


Annex







Annex




I Does this lead to biased results?

I Although we can not fully rule out any selection effects, both theory and thedata suggest that the observed effect on district court judges is not causedby selection effects


Annex







Annex

Possible selection effects - theory

I AI and DE models generally work very differently - however, in the context ofuncertainty about the law, it seems appropriate to use DE models(Siegelman/Waldfogel, 1999), as there is no reason to assume that oneparty has complete knowledge about how the judge is going to decide thecase

I In most DE models (e.g., under the Priest/Klein assumptions), caseselection mitigates any effect of changes in judges’ decision standardson the plaintiff’s success rates. Therefore, if any effect can be seen, itcould be interpreted as a lower bound on the change in decision standards(see also Henderson/Hubbard, 2014)

I However, following the logic employed by Gelbach (2014), we cannot fullyrule out the possibility that an increase (decrease) in decision standards leadto lower (higher) quality cases being selected for trial


Annex






Annex



Y Y'



Annex



Y Y'



Annex






Annex

Possible selection effects - data analysis

I We also aim at analyzing the data in order to detect any effect of circuitcourt judgments on settlement rates

I Note, however, that it is not possible to regress the probability ofsettlement on the number of circuit court judgments, because thenumber of circuit court judgments is highly correlated with the duration ofa case (proxy variable)

I A Cox regression (survival analysis) shows no increase in cases beingsettled or dropped after a circuit court judgment is rendered. In fact, lesscases are terminated by settlement or dropped after the appearance of newprecedent.


Annex






Annex






Annex

Regression results (3) – Effect on Amout Received

Outcome:Log(Amount Received) Award vs. No Award


pro − PCV -0.194 1.048 -0.461* -0.003 0.211 0.082(0.200) (0.403) (0.048) (0.935) (0.103) (0.192)

Cases 0.269* -0.504 0.435* 0.028 -0.100 -0.023(0.014) (0.515) (0.012) (0.301) (0.222) (0.590)

F (First stage) - 4.804 128.614 - 3.766 121.215N 251 251 251 378 378 378

Notes: Standard errors in parentheses. Heteroskedasticity-robust standard errors clustered at the circuit level.IV estimates: p-values based on small sample t-statistics. District and Year F.E. included. Samplerestricted to district court pleadings that terminated with a pro-plaintiff judgment.Award includes monetary, cost, or injunction. Amount received is in thousand dollars.Instruments in cols. 2 and 5: Number of panels with 1+, 2+, 3 Democrat appointees.LASSO instrument in col 3: Number of panels with 1+ Black cross-party appointment.LASSO instrument in col 6: Number of panels with 1+ Evangelical cross-party appointment.Observation level: District court judgment. + p < 0.10, * p < 0.05, ** p < 0.01.


Annex

Regression results (4) – Effect on Settlement

Outcome: Settlementall appellate judgments appellate judgments on merits only


pro − PCV -0.003 -0.111 -0.090* -0.032+ -0.025 -0.051+

(0.912) (0.388) (0.091) (0.079) (0.732) (0.058)

Cases -0.005 -0.047 0.037+ 0.010 0.007 0.021(0.687) (0.444) (0.070) (0.346) (0.875) (0.231)

F (First stage) - 0.930 257.061 - 3.899 243.210N 1206 1206 1206 1206 1206 1206

Notes: Standard errors in parentheses. Heteroskedasticity-robust standard errors clustered at the circuit level.IV estimates: p-values based on small sample t-statistics. District and Year F.E. included. Dependentvariable: 1=Settlement, 0=Judgment. Instruments in cols. 2 and 5: Number of panels with 1+, 2+, 3Democrat appointees. LASSO instrument in col 3, 6: Number of panels with 1+ Catholic former federalprosecutor. Observation level: District court judgment. + p < 0.10, * p < 0.05, ** p < 0.01.


Annex

Combined information on DC and CC cases in N.D.Ill.

Timing of District Court cases and Circuit Court judgments for N.D.Ill.

Time

Dis

tric

t Cou

rt C

ases

●●

●●

●

●

●

●

●

●

●

●

●●

●

●

●●

●

●

●

●●

●

2001 2002 2003 2004

●

●

Circuit Court judgment affirming merits of PCV claim

Circuit Court judgment denying merits of PCV claim

Other Circuit Court judgment pro PCV

Other Circuit Court judgment anti PCV

District Court case terminated by judgment

District Court case − other termination

District Court judgment pro PCV

District Court judgment anti PCV


Annex

Combined information on DC and CC cases in S.D.Fla.

Timing of District Court cases and Circuit Court judgments for S.D.Fla.

Time

Dis

tric

t Cou

rt C

ases

●

●

●

●

●

●

●

●

2001 2002 2003 2004

●

●










Annex

Combined information on DC and CC cases in D.Nev.


Time

Dis

tric

t Cou

rt C

ases

2001 2002 2003 2004



Annex

Combined information on DC and CC cases in S.D.Cal.

Timing of District Court cases and Circuit Court judgments for S.D.Cal.

Time

Dis

tric

t Cou

rt C

ases

●

●

●

●

●

●

●

2001 2002 2003 2004

●

●










Annex

Combined information on DC and CC cases in S.D.N.Y.

Timing of District Court cases and Circuit Court judgments for S.D.N.Y.

Time

Dis

tric

t Cou

rt C

ases

●

●

●

●

2001 2002 2003 2004

●

●










Annex

Combined information on DC and CC cases in E.D.Pa.

Timing of District Court cases and Circuit Court judgments for E.D.Pa.

Time

Dis

tric

t Cou

rt C

ases

●

●

2002 2003 2004

●

●



Annex

Combined information on DC and CC cases in N.D.Ohio

Timing of District Court cases and Circuit Court judgments for N.D.Ohio

Time

Dis

tric

t Cou

rt C

ases

●

●

●

2003 2004

Circuit Court judgment affirming merits of PCV claimCircuit Court judgment denying merits of PCV claimOther Circuit Court judgment pro PCVOther Circuit Court judgment anti PCV

●

●

District Court case terminated by judgmentDistrict Court case − other terminationDistrict Court judgment pro PCVDistrict Court judgment anti PCV


Annex

Descriptive statistics (1) - District court cases

District Cases Judgments District Cases Judgments District Cases Judgments

D.Me 3 0 N.D.Fla. 1 0 E.D.Wis. 2 0D.Mass 7 1 M.D.Fla. 28 2 W.D.Wis. 1 0D.N.H. 2 0 S.D.Fla. 50 8 E.D.Ark. 6 2D.Conn. 2 0 N.D.Ga. 6 0 S.D.Iowa 1 0N.D.N.Y. 2 0 S.D.Ga. 2 0 D.Minn. 1 0E.D.N.Y. 3 2 E.D.La. 9 3 E.D.Mo. 5 0S.D.N.Y. 16 6 M.D.La. 1 0 W.D.Mo. 5 0W.D.N.Y. 2 1 W.D.La. 2 0 D.Neb. 1 1D.N.J. 4 0 S.D.Miss. 1 0 D.S.D. 1 0E.D.Pa. 14 2 N.D.Tex. 10 2 D.Ariz. 1 0M.D.Pa. 2 1 E.D.Tex. 3 0 C.D.Cal. 4 0D.Md. 6 2 S.D.Tex. 9 1 S.D.Cal. 22 7E.D.N.C. 1 1 E.D.Ky. 3 1 D.Nev. 24 6M.D.N.C. 3 1 W.D.Ky. 1 0 D.Or. 2 2W.D.B.C. 7 0 E.D.Mich. 1 0 E.D.Wash. 5 0D.S.C. 8 0 W.D.Mich. 1 0 W.D.Wash. 14 0E.D.Va. 1 0 N.D.Ohio 14 3 D.Colo. 1 1N.D.W.Va. 1 0 S.D.Ohio 3 0 D.Kan. 1 0S.D.W.Va. 1 0 E.D.Tenn. 1 0 N.D.Okla. 3 0N.D.Ala. 4 0 N.D.Ill. 87 25 W.D.Okla. 3 1M.D.Ala. 1 0 N.D.Ind. 2 1 D.Utah 8 0S.D.Ala. 2 1 S.D.Ind. 2 1 D.D.C. 2 1


Annex

Descriptive statistics (2) - District court cases, contd...

Number of judgmentsNumber of other cases

0 20 40 60 80 100


Annex

Descriptive statistics (3) - Circuit court cases

Circuit Judgments on PCV Judgments on merits of PCV claim PCV judgments reversing DC

# Judgments # Pro Plaintiff # Judgments # Pro Plaintiff # Judgments # Pro Plaintiff

Fed. 1 0 1 0 0 0D.C. 1 0 1 0 0 01 6 2 5 2 1 02 13 1 9 1 4 43 11 4 10 4 1 14 3 0 3 0 1 15 17 6 16 5 8 76 9 5 8 5 3 27 9 2 7 1 6 48 4 1 4 1 1 19 14 6 14 6 2 210 3 2 2 2 1 011 5 2 2 1 0 0

TOTAL 96 31 82 28 28 22


Annex

Descriptive statistics (4) - Circuit court judgments whiledistrict court case pending

Numbers of circuit court judgments in same circuit while district court proceedings are pending

Number of circuit court judgments

Fre

quen

cy

020

4060

8010

012

014

0

0 5 10 15 20 25

● ●

●

●

●

●

●●

●

●

●●

●

●

●

●

●

●

●●

●●

●

●

●● ●

●

●

●●●

●

●

●

●

● ●●●

●● ●

●●●

●

●●● ●●● ●●●

●

●

●

●● ●●●● ●●

●

●●

● ●

●

●

●

●

● ●

● ●

●

●

● ●● ●●

●

●●

●

●

●● ● ●●

●

● ●

●

●

●

●

●

●●

● ●●

●

●

●● ●●

●

●●

●●●● ● ●●

●●●●

●● ●

●

●

●

●● ●

● ●

●

●

●

●●

●

●●● ●

●

●

●●

●

●

●

●●

● ●●

●

●

●

●

●

●● ●●●●

●

●●●

●

●

●

●● ●●●● ●

●

●

●

●●

●●

●●

●

●

●

●

●

●

●●

●

●

●

●

●

●

●

●

●

●

●

●

● ●

●●

●

●

●●● ●●●

●

●

●

●●

●

●

●

●

●● ●

●

●

●

●●

●●●

●●

●●●●● ●

●●●

● ●

●

●●●●●

●●

●

●

●● ●

●

●

●

●

●

●

●●●

● ●

●

●●

●

●

●

●

● ●

●

●●

●

●

●

●

●● ●

●

●

●

●

●

● ●

●

●

●

●

●●

●

●

●

●

●

●

●

●

● ●

●

●●● ●●● ●●

●

●

●

● ●

● ●●● ●

●●

● ●

●

●

●●

● ●

●●

●

●

●

●

●

●

●●

●

●

●

●●

●

●

● ●●

●●●●●

● ●● ●●●●●●

●

●

●

●

●● ●

●

●

●

●

●

●

●

●

●●●

●

●

●●

●

●

●

● ●

●

●

●

●

●

●

●

0 200 400 600 800 1000 1200 1400

02

46

810

12

Relationship between duration of district court case and number of circuit court cases issued while pending

Days pending

Num

ber

of c

ircui

t cou

rt d

ecis

ions

whi

le c

ase

pend

ing


Annex


●

●

●

●

●

●

●

●

●

●●

●

●●

●

●●

●

●

●

●

●

●

●

●●●

●

●●

●

●

●●

●

●

●●●

●

● ●●●● ●

●

●●

● ●●●●● ●●

●

●●

●●

●

●

●

●

●

●●

●●

●

●

●●●

●●

●

●●

●●●

● ●●●

●

●●

●

●●

● ●●

●●●

●

●●

●●● ● ●●

●●

●

●●

●● ●

●

●

● ●●

●

●

●

●

●

●●

●

●

●

●●

●

●

●

● ●

●

●

●

●●

●

●

●

●

●●● ●●● ●

●

●

●

● ●

●● ●

●

●

●

●●

● ●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●●

●

●

●

●

●●

●●

● ●●

●

●

●●●

● ●●

●

●

●

●

●●

●

●

●●●●●

●●

●

●

●●

● ●

●

●

●

●

● ●●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

● ●

●

●

●●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●●

●

●●

●

●

●

●

●

●

●

●

●

●

●●

●

●

●

●

●●

●

●

●

●

●

●

●

●

●

●

● ●

●

●

●●

●

●

●●

●●● ●●

●●● ●●●● ●●●

●

●

●

●●

●

●

●

●

●

● ●●

●●

● ●

●●

●

●

●

●

05

1015

2025

30

No. of circuit court judgments while district court case pending per circuit (all cases)

Circuit

No.

of c

ircui

t cou

rt ju

dgm

ents

DC 1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th 11th

050

010

0015

0020

00

Mean of cc judgments per decision

Mean of days pending

Total no. of cc decisions

●

District court case w/ judgment

Other district court case

05

1015

2025

30

No. of circuit court judgments while district court case pending per circuit (judgments only)

Circuit

No.

of c

ircui

t cou

rt ju

dgm

ents

DC 1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th 11th

050

010

0015

0020

00

Mean of cc judgments per decision


Total no. of cc decisions

District court case terminated by judgment


Annex


●

●

●

●

●

●

●

●

●

● ●

●

● ●

●

●●

●

●

●

●

●

●

●

● ●●

●

● ●

●

●

● ●

●

●

● ●●

●

● ● ●● ●●

●

● ●

●● ● ●●● ●●

●

● ●

●●

●

●

●

●

●

●●

● ●

●

●

●● ●

●●

●

●●

● ● ●

● ●●●

●

● ●

●

● ●

●● ●

● ● ●

●

● ●

● ●●● ●●

●●

●

● ●

●●●

●

●

● ●●

●

●

●

●

●

● ●

●

●

●

● ●

●

●

●

●●

●

●

●

●●

●

●

●

●

● ●● ●●● ●

●

●

●

●●

●● ●

●

●

●

●●

● ●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●●

●

●

●

●

● ●

● ●

●● ●

●

●

● ●●

●●●

●

●

●

●

●●

●

●

●●● ●●

● ●

●

●

●●

●●

●

●

●

●

●●●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●●

●

●

● ●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

● ●

●

●●

●

●

●

●

●

●

●

●

●

●

●●

●

●

●

●

●●

●

●

●

●

●

●

●

●

●

●

●●

●

●

●●

●

●

● ●

● ● ●● ●

● ●●●● ●●●● ●

●

●

●

●●

●

●

●

●

●

● ●●

● ●

●●

●●

●

●

●

●

2000 2001 2002 2003 2004

05

1015

2025

30

No. of circuit court judgments while district court case pending per year (all cases)

Year of termination of district court proceedings

No.

of c

ircui

t cou

rt ju

dgm

ents

whi

le p

endi

ng

050

010

0015

0020

00

Mean of cc judgments

Mean of days pending●



2000 2001 2002 2003 2004

05

1015

2025

30

No. of circuit court judgments while district court case pending per year (judgments only)

Year of termination of district court proceedings

No.

of c

ircui

t cou

rt ju

dgm

ents

whi

le p

endi

ng

050

010

0015

0020

00

Mean of cc judgments


District court case terminated by judgment


Annex

Descriptive statistics (7) - Relationship between districtcourt case duration and decision type

●

●

●

●

● ●

●●

●

●●● ●

●

●

●

●

●

●

●●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●●

●

●

● ●

●

●

●

● ●

●

●● ●

●●

●

● ●

●

●●●

●●

●

●

●

●

●

●●

●

●

●

●●

●

●

●

●

●

●

●

●

●● ●

● ●

●

●●

●

●●

●

●

●

●

●

●

●●

●●

●

●

●

●

●

● ● ●●

●

●

●●

●●

●

●

●

●

●

●

●●

●●

●

●

●●

●

●

● ●

●●●

●●

●

● ●

●● ●

●

●

●

●

●

●

●

●

●

●

●

●●

●

●

●

●●●●

●●

●●

●

●●

●

● ●●

●

●●

●●

●

●●

●

●

●●

●

●

●

●

●

●

●

●●

●

●

●●●

●

●

●●●

●

●

●●

●

●

●

●

● ●

●

●

●

●

●

●

●

●

●●

●●

●

●

●

●

●

●

●

●

●●

●

●

●●

●

●

●

●

●

●

●

● ●

●

●

●

●

●

● ●

●

●●

●

●

●

●

●

●●● ●

●

●●

●●●

●

●

● ●●

●

●

●

●

●

●●●

●

●●●

●

● ●

●

●

●

●

●●●

●

● ●

●●

●

●

●

●●

●

●

●● ●

●

●

●●

●

●

●

●

●

●●●

●

●

●●

●●

●

●

●

●●●

●

●●●

●●

●

●

●

●

●

●

●●

●

●

●●

●

●

●

●

●

●

●

●

●

●

●●

●

●●

● ●

●

●

●

●

●

●●

●● ●

●

●

●

●

●●

●

●

●

●

●●

●●●

●●

●●●●

●

●●

●

●

● ●

●●

●

●●●

●

●

●

●

●

●●

●

●

●●

●

●

●

●●

●

0 500 1000 1500

Relationship between duration of district court case and judgment

Days pending

Cas

e de

cide

d by

judg

men

t

No

judg

men

tJu

dgm

ent


Annex

Descriptive statistics (8) - Relationship between ccjudgments pro and anti PCV

●●

●

●

●

●●

●

●

● ●

●

●

●●

●

●

●●

●

●

●

●

●

●●

●●

●

●

●●● ●

●

●

●●

●

●

●

●

●●●

● ●●

●

●● ●

●

●

●

● ●

●

●

●●●

●●

●

●● ●

●

●

●

●●●

●

●●

●

●

●

●

●

●

●●

●●

●●●

●●

●●

●●

●●●

●●●

●

●

●●

●

●

●

●●

●

●●●●

●

●

●

●●

●●

●

●

●

●

●●

●

●

●

●

●

●

●

●●●

●

●

●

●

●

●

●

●

●

●

●

●

●●

●●

●●●

●

●●

●

●

●

●

●●●●

●

●

●●

●

●●●●

●

●

●●● ●● ●

●

●●●

●●

●●

● ●●

●

●●

●

●●●

●●

●

●●

●

●

●●

●●

●●

●●

●

● ●

●●

●

●

●

●●●

●

●

●

●

●

●

●

●

●●

●

●

●

●

●

●

●● ●

●

●

●

●

●

●

●

●

●

●

●

●●

●

●●

●

●●

●

●

●●

●

● ●

●

●● ●●

●●

●

●

●

●

●

●●

●

●

●

●●

●

●

●●

●●

●

●

●

●

●

●

●

●●

●● ●

●

●

●

●●

●

●

●

● ●

●●

●●●

●

●

●●

●

●● ●

●

●

● ●

●●

●

●●●

●

●

●●●

●

●●●

●

●

0 2 4 6 8

02

46

8

Number of circuit court judgments pro and anti PCV while case pending (all cases)

Number of circuit court judgments anti PCV

Num

ber

of c

ircui

t cou

rt ju

dgm

ents

pro

PC

V

●

Terminated by judgment

Other case termination●



0 2 4 6 8

02

46

8

Number of circuit court judgments pro and anti PCV while case pending (judgments only)

Number of circuit court judgments anti PCV

Num

ber

of c

ircui

t cou

rt ju

dgm

ents

pro

PC

V



Documents

Measuring the Effects of Legal Precedent in U.S. Federal ...users.nber.org/~dlchen/papers/Judicial_Compliance_in_District_Courts_slides.pdf · Measuring the Effects of Legal Precedent