Showing papers in "Journal of Empirical Legal Studies in 2020"
TL;DR: This article found that reminding people about the government's responsibility under the Refugee Convention to accept refugees triggers a backfire effect, decreasing support for accepting them, driven by respondents who support the nationalist-populist incumbent party and by lower-educated respondents.
Abstract: How do international laws affect citizens' willingness to accept refugees? In full and partial democracies, citizens' attitudes can influence national policy. A growing literature suggests international institutions can influence citizens' attitudes on foreign policy issues, and therefore lead to policy change. But those studies are almost entirely confined to domestic human rights and U.S.-based respondents; none consider refugee policy. Using data from a survey experiment administered in September 2017 via face-to-face interviews with 1335 Turkish citizens, we investigate how international norms affect citizens' willingness to accept refugees. Our findings are surprising: reminding people about the government's responsibility under the Refugee Convention to accept refugees triggers a backfire effect, \emph{decreasing} support for accepting them. This effect appears driven by respondents who support the nationalist-populist incumbent party and by lower-educated respondents. We therefore provide evidence that international refugee law -- and perhaps international institutions generally -- can trigger a political backlash, undermining the very policies that they promote.
20 citations
TL;DR: The Patent Similarity Dataset, comprising vector space model and computed vectors based similarity scores for U.S. utility patents, is introduced and measures that leverage patent similarity to provide insight into innovation and intellectual property law issues of interest to both scholars and policymakers are introduced.
Abstract: We introduce and describe the Patent Similarity Dataset, comprising vector space model‐based similarity scores for U.S. utility patents. The dataset provides approximately 640 million pre‐calculated similarity scores, as well as the code and computed vectors required to calculate further pairwise similarities. In addition to the raw data, we introduce measures that leverage patent similarity to provide insight into innovation and intellectual property law issues of interest to both scholars and policymakers. Code is provided in accompanying scripts to assist researchers in obtaining the dataset, joining it with other available patent data, and using it in their research.
20 citations
TL;DR: In this article, the impact of caseload on judicial decision making was investigated in the Israeli judiciary and six senior registrars were appointed in two of the six magistrate's court districts, and they found that the reduction had a significant impact on the process and outcomes of judicial decision-making.
Abstract: What is the impact of caseload on judicial decision making? Is increasing judicial staff effective in improving judicial services? To address these questions, we exploit a natural, near‐randomized experiment in the Israeli judiciary. In 2012, six senior registrars were appointed in two of the six magistrate's court districts. The choice of districts was motivated by reasons unrelated to judicial performance. In these two districts, the civil caseload per judge was substantially reduced. We find that the reduction had a significant impact on the process and outcomes of judicial decision making. Judges working in courts with reduced caseload invested more resources in resolving each case. The effect is mostly to the advantage of plaintiffs, who were more likely to win, recover a larger fraction of their claims, and be reimbursed for litigation costs. We discuss the implications for judicial management and theories about judicial decision making.
15 citations
TL;DR: In this article, the authors examined the efficacy of using wider tick sizes to subsidize market-making in small capitalization stocks and showed that realized spreads decay quickly within the initial microseconds of a trade.
Abstract: Using data from the 2016-2018 tick size pilot study, we examine the efficacy of using wider tick sizes to subsidize market-making in small capitalization stocks. We demonstrate that realized spreads decay quickly within the initial microseconds of a trade. The effect reduces the subsidy offered by wider tick sizes, particularly for non-HFT market makers. The profit subsidy from wider tick sizes is also compromised by a significant shift in trading to “taker/maker” exchanges and to midpoint trading in non-exchange venues. The pilot’s exception for midpoint trades also accounts for the fact that nearly a third of trading remains in non-exchange venues despite the inclusion of a trade-at rule. Overall, these findings point to considerable inefficiencies in the pilot study’s goal of using wider tick sizes to subsidize liquidity provision in small capitalization stocks
12 citations
TL;DR: This paper found strong evidence of data bias based on relationships between the party affiliations of judges on appellate court panels and the characteristics of cases that result in published opinions, which imply that the inferential model that underlies much of the judicial politics literature can lead to biased or spurious findings concerning the causal influence of judicial attributes on case outcomes.
Abstract: For decades, researchers have studied the relationship between the political leanings of judges and the outcomes of appellate litigation in the United States. The primary source of data for this research has been published judicial opinions that describe cases and their outcomes. However, only a relatively small number of cases result in published opinions, and this sample of cases may be subject to serious biases. Based on computational text analysis of over 150,000 published opinions issued by federal appellate courts in the years 1970–2010, we find strong evidence of data bias based on relationships between the party affiliations of judges on appellate court panels and the characteristics of cases that result in published opinions. These relationships imply that the inferential model that underlies much of the judicial politics literature can lead to biased or spurious findings concerning the causal influence of judicial attributes on case outcomes.
12 citations
TL;DR: Kim et al. as mentioned in this paper examined the varying extent to which cases and judicial activity are visible in the several data sources commonly used by district court researchers and found that these differences in case and motion visibility can affect the results of empirical analyses relating to, for example, the success rates of litigants and whether the party of the appointing president affects judicial behavior.
Abstract: Three decades ago, Siegelman and Donohue aptly characterized research about courts and litigation that relied only on published opinions as “studying the iceberg from its tip.” They implored researchers to view published district court opinions “with greater sensitivity to the ways in which such cases are unrepresentative of all cases”. The dynamic, multistage nature of trial court litigation makes a focus solely on published opinions particularly ill‐suited to the study of federal district courts. Expanded electronic access to court documents now allows more precise analysis of the ways in which published cases are unrepresentative and what differences that makes for conclusions about the work of district courts. Heeding Siegelman and Donohue's admonition, this study seeks to map the iceberg, exploring the extent to which the visible part misrepresents what lies below the surface. Using a supplemented version of the Kim, Schlanger, and Martin EEOC Litigation Project data, this article examines the varying extent to which cases and judicial activity are visible in the several data sources commonly used by district court researchers. More specifically, we analyze how the work of federal district courts looks different depending on whether research relies on published opinions, on opinions available on Westlaw or Lexis (both “published” and “unpublished”), or on more comprehensive data available on PACER (Public Access to Court Electronic Documents). Our results reveal vast variation in visibility of cases and motions, depending on the data source used. We also demonstrate that these differences in case and motion visibility can affect the results of empirical analyses relating to, for example, the success rates of litigants and whether the party of the appointing president affects judicial behavior. Our findings mean that utilizing docket sheets, now available electronically, to gather data will often be required to draw accurate conclusions about the nature of district court litigation and the behavior of district court judges.
11 citations
TL;DR: Adherence to a universal set of principles guided construction of the Israeli Supreme Court Database, new and original infrastructure encoding information from all panel cases opened between 2010 and 2018 in theIsraeli Supreme Court.
Abstract: Driving discovery in the study of law and legal institutions often requires infrastructure in the form of databases and other tools. The challenge is how to build the infrastructure. For obvious reasons, transplanting coding rules and variables from one dataset to the next is perilous; specialized knowledge of local conditions is necessary before one piece of datum is collected. Also required is adherence to a universal set of principles that distinguish high‐quality infrastructure; namely, that the tool is capable of addressing real‐world problems, accessible, reproducible and reliable, sustainable and updatable, and foundational. These principles guided construction of the Israeli Supreme Court Database, new and original infrastructure encoding information from all panel cases opened between 2010 and 2018 in the Israeli Supreme Court.
10 citations
TL;DR: In this paper, the authors estimate the extent of defensive medicine by physicians during labor and delivery, drawing on a novel and significant source of variation in liability pressure, and find suggestive evidence that liability immunity increases cesarean utilization and treatment intensity during childbirth.
Abstract: We estimate the extent of defensive medicine by physicians during labor and delivery, drawing on a novel and significant source of variation in liability pressure. In particular, we embrace the no‐liability counterfactual made possible by the structure of liability rules in the Military Heath System. Active‐duty patients seeking treatment from military facilities cannot sue for harms resulting from negligent care, while protections are provided to dependents treated at military facilities and to all patients—active‐duty or not—who receive care from civilian facilities. Drawing on this variation and addressing endogeneity in the choice of treatment location by estimating mother fixed effects specifications and by exploiting exogenous shocks to care location choices stemming from base‐hospital closures, we find suggestive evidence that liability immunity increases cesarean utilization and treatment intensity during childbirth, with no measurable negative effect on patient outcomes.
9 citations
TL;DR: In this article, the authors used an unconventional outcome variable, percent deviation, to investigate guideline digressions in a nested, multilevel model and found that approximately 8 to 10 percent of the deviation in sentence length can be attributed to judges' differential sentencing behaviors.
Abstract: Analyzing sentencing disparity calls for more calibrated measures to capture the nuances of judicial discretion within jurisdictions that adopt strict sentencing guidelines. This article uses an unconventional outcome variable, percent deviation, to investigate guideline digressions in a nested, multilevel model. Percent deviation is calculated based on the difference between the guidelines’ “arithmetic starting point” and the actual starting point that a judge adopts. Two equations were used to measure percent deviation from the arithmetic starting point before and after adjustment for guilty plea sentence reductions. Extracting data on drug trafficking cases from an open‐source database from the Hong Kong Judiciary ( = 356), we illustrate how percent deviation can be employed as a measure of inter‐judge disparity using hierarchical linear models (HLMs). Our findings suggest that approximately 8 to 10 percent of the deviation in sentence length can be attributed to judges’ differential sentencing behaviors. The deviation is affected by case characteristics as well as judicial characteristics. Due to the wide guideline ranges, departures from said guidelines’ ranges are not common. This indicates that the guideline ranges mask the deviation and inter‐judge disparity that exist and recur.
9 citations
TL;DR: In this paper, the authors presented at the "Inequality within Couples Workshop" at Humboldt University in Berlin and the junior researcher workshop at the Center for Family Sciences at the University of Basel.
Abstract: This research was funded by the Swiss National Science Foundation (Grant-Nr: 149594). Prior versions of this manuscript were presented at the “Inequality Within Couples Workshop” at Humboldt University in Berlin and the junior researcher workshop at the Center for Family Sciences at the University of Basel. The author thanks the Swiss Federal Statistical Office for providing the data, anonymous referees and workshop participants for their helpful comments and Joshua Vidich for proofreading the manuscript
8 citations
TL;DR: In this paper, the authors study fees in the largest securities class actions and find that firms invest more time in litigation against larger companies, with the largest potential damages, particularly when there are multiple lead counsel firms.
Abstract: In this article, we study attorney fees awarded in the largest securities class actions: “mega‐settlements.” Consistent with prior work, we find larger fee awards but lower percentages in these cases. We also find that courts are more likely to reject or modify fee requests made in connection with the largest settlements. We conjecture that this scrutiny provides an incentive for law firms to bill more hours, not to advance the case, but to help justify large fee awards—“make work.” The results of our empirical tests are consistent with plaintiffs’ attorneys investing more time in litigation against larger companies, with the largest potential damages, particularly when there are multiple lead counsel firms. We find a similar pattern with relative efficiency, with more hours per docket entry for the largest‐stake cases with multiple lead counsel firms. Overall, our results suggest that plaintiffs’ attorneys are receiving windfall fee awards in at least some mega‐settlement cases at shareholders’ expense.
TL;DR: This article examined whether the same pattern of sentencing discrepancies is to be found with regard to offenses of omission, the prohibition of which imposes a legal duty to come to the aid of a victim; offenses which are based on social solidarity.
Abstract: Studies of sentencing disparities show that in sentencing for cross-race or cross-ethnic violent offenses, minority defendants are likely to be sentenced to harsher punishments when the victim belongs to the majority group. Our study examines whether the same pattern of sentencing discrepancies is to be found with regard to offenses of omission, the prohibition of which imposes a legal duty to come to the aid of a victim; offenses which are based on social solidarity. The dataset includes all cases in which defendants were convicted of hit-and-run traffic offenses in Israel from 2001 to 2013. The surprising results show that hit-and-run drivers who belong to either the majority or minority ethnic group are likely to be sentenced to more severe punishments when the victim belongs to the same ethnic group than when the victim belongs to a different ethnic group.
TL;DR: This article examined civil appeals in three federal appellate courts, concentrating on the briefing, the attorneys, and the complexity of the case and found no evidence that short briefs are more persuasive, while the evidence in favor of long briefs on the appellant's side is provocative.
Abstract: The relationship between judicial inputs and outputs remains opaque. Conventional wisdom is plentiful but useful evidence is not. This study examines civil appeals in three federal appellate courts, concentrating on the briefing, the attorneys, and the complexity of the case. We find no evidence that short briefs are more persuasive, while the evidence in favor of long briefs on the appellant's side is provocative. We also find suggestive evidence that the experience of the lead lawyer on the appellee's side matters. However, “Big Law” firms and large teams of lawyers do not seem to perform better on appeal, all else equal. Finally, different kinds of case complexity point in different directions. The presence of a cross‐appeal is associated with judge votes to reverse—but not necessarily in favor of the cross‐appellant. At the same time, complex trial‐level proceedings may be associated with judge votes to affirm.
TL;DR: In this article, the authors developed an empirical methodology to analyze some features that may characterize bi-dimensional courts when dissenting opinions are not frequent, and applied the analysis to the particular case of the Consell de Garanties Estatutaries de Catalunya (Catalan Constitutional Court).
Abstract: The empirical literature has consistently shown that judicial ideal points can be estimated in a one‐dimensional space that reflects the traditional conservative‐progressive dichotomy. In this article, we develop an empirical methodology to analyze some features that may characterize bi‐dimensional courts when dissenting opinions are not frequent. We apply the analysis to the particular case of the Consell de Garanties Estatutaries de Catalunya (Catalan Constitutional Court). The results illustrate that judicial preferences on conservative‐progressive grounds are likely to affect the decision outcome of the Court on issues having significant public policy content. Conversely, judicial preferences regarding Spanish‐Catalan sovereignty tend to encroach on judgments concerning public policy, thus affecting the outcome of all judgments of the Court regardless of content type. Furthermore, we find that judicial preferences in the Spanish‐Catalan sovereignty dimension are pervasive enough to shift the outcome of all types of decisions in favor of Catalan institutions. Policy conclusions are derived.
TL;DR: The authors analyzed the distribution of sentences meted out in one year in two different jurisdictions (i.e., England and Wales, and New South Wales, Australia) and revealed that sentencers prefer certain numbers when meting out sentence lengths (in custody and community service) and amounts (for fines/compensation).
Abstract: Criminal sentencing is a complex cognitive activity often performed by the unaided mind under suboptimal conditions. As such, sentencers may not behave according to policy, guidelines and training. We analyzed the distribution of sentences meted out in one year in two different jurisdictions (i.e., England and Wales, and New South Wales, Australia). We reveal that sentencers prefer certain numbers when meting out sentence lengths (in custody and community service) and amounts (for fines/compensation). These ‘common doses’ accounted for over 90% of sentences in each jurisdiction. The size of these doses increased as sentences became more severe, and doses followed a logarithmic pattern. These findings are compatible with psychological research on preferred numbers and are reminiscent of Weber’s and Fechner’s laws. Our findings run contrary to arguments against efforts to reduce judicial discretion, and potentially undermine the notion of individualized justice, as well as raise questions about the (cost) effectiveness of sentencing.
TL;DR: In this paper, the authors explored the relationship between courtroom confidence and other factors and found that jurors gave most weight to the confidence of eyewitnesses, especially that expressed in the courtroom, irrespective of the eyewitness's testimony about confidence (low or high) at the initial police lineup.
Abstract: A pressing concern with the eyewitness testimony used in many criminal cases is that jurors may be swayed by the high confidence of an eyewitness and, as a result, may disregard other factors that provide more diagnostic information. Mock jurors were surveyed using a large national sample of 1,684 laypeople, selected to be representative of the U.S. population (age, race, gender, geographic region), using mock trial videos of eyewitness testimony. To explore the relationship between courtroom confidence and other factors, we used a fractional factorial design, permitting examination of the relationships among seven factors. Among these seven factors, we found that jurors gave most weight to the confidence of eyewitnesses, especially that expressed in the courtroom, irrespective of the eyewitness's testimony about confidence (low or high) at the initial police lineup. Jurors' assessments were not sensitive to the other factors or their interactions in the experiment: crime type (burglary or sexual assault), the race of the defendant and eyewitness, or information provided in judicial instructions or by expert testimony. The disproportionate importance of the eyewitness's expressed confidence has implications for the effectiveness of legal efforts to inform jurors about factors affecting eyewitness memory.
TL;DR: In this article, the authors investigate the economic viability of content in a major creative industry (commercial music) using a novel longitudinal dataset of weekly sales and streaming counts, and find that the typical sound recording has an extremely short commercial half-life, on the order of months, rather than years or decades.
Abstract: Copyright provides a long term of legal excludability, ostensibly to encourage the production of new creative works. How long this term should last, and the extent to which current law aligns with the economic incentives of copyright owners, has been the subject of vigorous theoretical debate. We investigate the economic viability of content in a major creative industry—commercial music—using a novel longitudinal dataset of weekly sales and streaming counts. We find that the typical sound recording has an extremely short commercial half-life—on the order of months, rather than years or decades—but also see evidence that subscription streaming services extend the period of economic viability. Strikingly, though, we find that decay rates are sharp even for blockbuster songs, and that the patterns persist when we approximate weekly revenue. Although our results do not provide an estimate of the causal effect of copyright on incentives, they do put bounds on the problem, and suggest a misalignment between the economic realities of the music industry and the current life-plus-seventy copyright term in the United States.
TL;DR: In this article, the authors present results from a randomized field experiment, carried out over the course of three years, in which 336 prominent scientific experts agreed to provide input on U.S. patent applications.
Abstract: Many have advocated for the expansion of peer review to improve scientific judgments in law and public policy. One such test case is the patent examination process, with numerous commentators arguing that scientific peer review can solve informational deficits in patent determinations. We present results from a novel randomized field experiment, carried out over the course of three years, in which 336 prominent scientific experts agreed to provide input on U.S. patent applications. Their input was edited for compliance with submission requirements and submitted to the U.S. Patent and Trademark Office (USPTO) by our research team. We show that the intervention caused examiners to (i) increase search efforts and citations to the non-patent (scientific) literature and (ii) grant the application at lower rates in the first instance. However, results were substantially weaker and resource costs substantially higher than anticipated in the literature, highlighting significant challenges and questions of institutional design in bringing scientific expertise into law and government.
TL;DR: In this article, the authors investigate the cost of legal restrictions on experience rating in auto and home insurance and find that the cost is an opportunity cost as experience rating can mitigate the problems associated with unobserved heterogeneity in claim risk.
Abstract: We investigate the cost of legal restrictions on experience rating in auto and home insurance. The cost is an opportunity cost as experience rating can mitigate the problems associated with unobserved heterogeneity in claim risk, including mispriced coverage and resulting demand distortions. We assess this cost through a counterfactual analysis in which we explore how risk predictions, premiums, and demand in home insurance and two lines of auto insurance would respond to unrestricted multiline experience rating. Using claims data from a large sample of households, we first estimate the variance‐covariance matrix of unobserved heterogeneity in claim risk. We then show that conditioning on claims experience leads to material refinements of predicted claim rates. Last, we assess how households’ demand for coverage would respond to multiline experience rating. We find that the demand response would be large.
TL;DR: In this paper, the authors exploit the discontinuity in the integration into the colonial court district of Real Audiencia in Upper Peru to estimate how colonial institutions have impacted local development across 527 departments in Argentina.
Abstract: We exploit the discontinuity in the integration into the colonial court district of Real Audiencia in Upper Peru to estimate how colonial institutions have impacted local development across 527 departments in Argentina. Our identification strategy takes advantage of geo‐referenced spatial boundary splits with local quasi‐randomization between the localities integrated into the colonial court jurisdiction and the localities outside Audiencia's jurisdiction. The results show the impact of colonial institutions imposed by real audiencia in Upper Peru is both strong and remarkably persistent. Departments outside the colonial court district have lower literacy rates, a less computer‐literate population, better physical and digital infrastructure, and more widespread computer ownership. The established effects of real audiencia do not seem driven by the climatic conditions and environment of disease, and are robust to a battery of specification checks, placebo tests, and falsification tests. We show that Audiencia's effect persisted through its influence on public goods provision, economic specialization patterns, clientelist networks, and elite control of the political representation.
TL;DR: The authors found that the motivation to write separately is based largely in ideologically differences among panelists and less so on preferences of the Supreme Court, and that ideological distance from the majority opinion writer is still an important factor.
Abstract: Most of the empirical work on separate opinion writing by lower federal court judges examines the U.S. Courts of Appeals. Given the Supreme Court's discretionary jurisdiction, it is argued that dissenting opinions operate as a cue signaling that a case is worthy of review. Concurrences, on the other hand, allow judges to join dispositional majorities while still expressing differences in legal reasoning from the majority. Likely in an effort to minimize dissent, the behavior of circuit court judges is found to be less influenced by ideology when potential dissenters serve with them. Despite the specter of Supreme Court review, these works generally find that the motivation to write separately is based largely in ideologically differences among panelists and less so on preferences of the Supreme Court. What, however, does separate opinion writing look like when the Court's jurisdiction is mandatory, as it is over three‐judge district court panels? Among other uses required by law, these district court panels are used to adjudicate cases arising under the Voting Rights Act of 1965. These panels also differ from the traditional judicial structure by placing district court judges, who traditionally decide cases individually, in a multimember setting with another district court judge and a circuit court judge. Examining separate opinion writing on these panels, we find that ideological distance from the majority opinion writer is still an important factor. This, however, is conditioned by the preferences of the Supreme Court, which exert a much stronger influence over behavior than they do in the traditional appellate court setting.
TL;DR: A set of common assignment procedures that I call “de-randomizing” events are identified, which should be accounted for in order to make unbiased causal claims but are commonly ignored or not even recognized by researchers utilizing random judicial assignment.
Abstract: This article adds to the growing literature challenging the general assumptions of random judicial assignment by identifying a set of common assignment procedures that I call “de-randomizing” events. These events, which include non-random assignment itself, should be accounted for in order to make unbiased causal claims but are commonly either ignored or not even recognized by researchers utilizing random judicial assignment. This article also attempts to fill in what others have noted to be a dearth of information on the assignment protocols of courts other than the U.S. Courts of Appeals by presenting original data from a survey of 60 state-level criminal courts, outlining their assignment protocols, and identifying the extent to which they feature the “de-randomizing” events mentioned above.
TL;DR: In this paper, the authors focus on a procedure in the Supreme Court of Israel, which allows each Justice to compose three-Justice panels, collecting an original database of decisions in this procedure.
Abstract: How would judges compose judicial panels, if they could? We focus on a procedure in the Supreme Court of Israel, which allows each Justice to compose three-Justice panels, collecting an original database of decisions in this procedure. The data reveal strong bias in Justices’ panel composition. A Gini Coefficient measuring the extent of inequality in each Justice’s panel composition, which runs between zero (total equality) and one (total inequality), is 0.82 on average, which contradicts the random composition theory. The high variance in the choice of panel members contradicts the professional composition theory. The data support the idea that Justices compose panels strategically, and accordingly the data uncover Justices’ revealed preference for panel members. We use the data to depict the relationships within the Supreme Court of Israel, and identify three groups of Justices. Lastly, we show that Justices who were selected by the current Chief Justice under the above procedure, before she became Chief Justice, are more likely to sit on panel with her in ordinary hearings, after she became Chief Justice. Since the Chief Justice has the legal authority to compose ordinary panels, this is also consistent with strategic panel composition.
TL;DR: The authors used U.S. corporate tax return data to assess how government revenue would have changed if, over the period 1957-2013, corporations had been subject to a hypothetical corporate cash flow tax, that is, a tax allowing for the immediate deduction of investments in long-lived assets like equipment and structures.
Abstract: This article uses U.S. corporate tax return data to assess how government revenue would have changed if, over the period 1957–2013, corporations had been subject to a hypothetical corporate cash flow tax—that is, a tax allowing for the immediate deduction of investments in long‐lived assets like equipment and structures—rather than the corporate tax regime actually in effect. Holding taxpayer behavior fixed, the data indicate actual corporate tax revenue over the most recent period (1995–2013) differed little from that under the hypothetical cash flow tax. This result has three important implications. First, capital owners appear to bear a large fraction of the corporate tax today. This is because economic theory holds that corporate cash flow taxes are largely borne by capital owners and my result implies that the actual tax behaves in practice much like a cash flow tax. This theory is embodied in the Treasury's most recent model of corporate tax incidence. Applying the model to my results implies that only a small portion (2–10 percent) of the U.S. corporate tax was borne by labor in the years before the 2017 Act and thus capital providers are the primary beneficiaries of the Act's large corporate rate cut. Second, the results suggest that the United States could switch fully over to a cash flow tax, which is likely to be administratively simpler for both the government and corporations, at relatively low revenue cost. Third, the impact of fully switching to a cash flow tax on the operations of the real economy and its efficiency are likely to be fairly small. This is precisely because the corporate tax has already evolved to largely mimic a cash flow tax, and the article explores the reasons underlying this evolution using a novel dataset.
TL;DR: Evidence is found that, following the Riegel decision, device manufacturers file more PMA applications for high risk product categories (relative to the comparable change for low risk categories), suggesting that firms are sensitive to the newly immunized risk.
Abstract: The Supreme Court's decision in Riegel v. Medtronic unexpectedly and immediately immunized medical device manufacturers from certain types of state tort liability. Riegel immunized manufacturers from liability if their devices had been approved through the Food and Drug Administration's most rigorous|and costly|review process, premarket approval ("PMA"). Exploiting this unanticipated decision, we examine whether manufacturers strategically respond to this new immunity. We find evidence that, following the Riegel decision, device manufacturers file more PMA applications for high risk product categories (relative to the comparable change for low risk categories), suggesting that firms are sensitive to the newly immunized risk. We additionally find evidence that physician treatment patterns with respect to medical devices also change, consistent with Riegel shifting liability away from device manufacturers and towards physicians. The analysis provides evidence that sophisticated actors respond to changes in their expected legal liability and that technical legal decisions have important ramifications for the provision of health care.