EXAM NO. ____________
Georgetown University Law Center
Examination in Economic Reasoning and the Law
(3 Hours)
Professor Avery Wiener Katz
Final Examination
Thursday, December 11, 1997
1:30 pm -- 4:30 pm
Instructions:
Please do not turn the page until the exam proctor gives the signal.
QUESTION 1 (90 minutes, 50% of exam)
In Sullivan v. O'Connor, 363 Mass. 579, 296 N.E.2d 183 (1973), the plaintiff, a professional entertainer, claimed to have entered into a contract with the defendant, a plastic surgeon, under which the defendant allegedly promised to improve her appearance. According to the plaintiff, the surgery failed to achieve the promised result; instead, it disfigured and deformed her nose, and caused her pain and suffering. As the court's opinion relates:
[J]udging from exhibits, the plaintiff's nose had been straight, but long and prominent; the defendant undertook by two operations to reduce its prominence and somewhat to shorten it, thus making it more pleasing in relation to the plaintiff's other features. Actually the plaintiff was obliged to undergo three operations, and her appearance was worsened. Her nose now had a concave line to about the midpoint, at which it became bulbous; viewed frontally, the nose from bridge to midpoint was flattened and broadened, and the two sides of the tip had lost symmetry. This configuration evidently could not be improved by further surgery. The plaintiff did not demonstrate, however, that her change of appearance had resulted in loss of employment.
The jury returned a verdict for the plaintiff on her contract claim, while denying her relief under an alternate tort claim she brought under a theory of negligent malpractice.
The defendant, who had unsuccessfully argued at trial that no such promise had been made, argued on appeal that agreements under which a physician undertakes to effect a cure should be declared unenforceable on grounds of public policy. The court rejected this argument, holding that despite the many practical problems raised by such agreements, case law was clearly against the defendant's position. With regard to damages, however, the court held that the plaintiff could not recover the usual measure of damages available in a standard commercial contract. Instead of expectation damages, intended to put the plaintiff in the position she would have enjoyed in had the contract had been performed, the court awarded reliance damages, compensating her only for the detriment she suffered in reliance upon the agreement. In the court's view, such detriment properly included the worsening of her physical condition, and the pain and mental distress she suffered from the third (and unanticipated) operation. The court did not resolve, however, whether pain and suffering resulting from the two anticipated operations could count as compensable detriment.
Write an essay critiquing the Sullivan case from the viewpoint of law and economics. What consequences, if any, does such a rule of law have for the behavior of future doctors and patients? What are the likely effects of the decision on individual and social welfare, and were there better ways, doctrinal or otherwise, to resolve the case or the larger policy issues arising out of the case? In writing your essay, you may find it useful to consider variations on the facts that you think would be empirically significant in resolving the larger policy issues. But your answer should be grounded in the course materials and in the ideas that we have discussed.
QUESTION 2 (90 minutes, 50% of exam)
In August 1997, the state of Louisiana adopted a statute providing for a new form of matrimonial relationship, to be called "covenant marriage." Under this statute, couples otherwise eligible to marry will choose between two forms of marriage. Those who opt for a standard marriage will be able to obtain a no-fault divorce following a six-month separation; while those who opt for covenant marriage must promise to undertake marital counseling prior to any separation and may divorce only under a limited set of circumstances [i.e., if the couple has been separated for two years; if one spouse has committed adultery, been sentenced to prison for a felony, abandoned the home for one year, or abused the other spouse or a child; or if the couple has been legally separated for a prescribed period following proof of habitual intemperance or mental cruelty.] Additionally, all couples are obliged to undergo premarital counseling designed to help them choose their preferred form of marriage. Couples married before the law was passed are permitted to convert their marriage to the covenant type if they undergo counseling and comply with the other formal statutory requirements.
The covenant marriage statute attracted national attention. Proponents of covenant marriage argued, inter alia, that the statute would strengthen families by making it harder to get divorced, encourage couples to put more effort into their marriages, foster better communication between prospective spouses and force them to more seriously consider their compatibility, and allow couples to express their commitment to each other and their support for traditional values. They also argued that the option to enter into a covenant marriage, together with counseling, would enhance couples' choices. Opponents argued, inter alia, that prospective spouses would be pressured into choosing covenant marriage, that more spouses and children would be trapped in unhappy and abusive marriages, that the constraints provided by covenant marriage would in practice bind only the poor, and that being forced to choose between standard and covenant marriage was itself an improper infringement on personal autonomy. The debate continues; and lawmakers in other states are reportedly considering similar legislation.
Part A. Write an essay analyzing the merits of the Louisiana covenant marriage statute from the economic viewpoint. What behavioral incentives, if any, does it provide; and how will it affect the decisions and the welfare of current and prospective spouses, children, and other relevant parties? In writing this essay, you may discuss any of the claims put forward above, or other arguments that you think relevant, but you should ground your analysis in the material we have studied in this course.
Part B. Write a further essay assessing the merits of the economic approach as a tool for analyzing Louisiana's covenant marriage statute. What relevant considerations, if any, does the economic approach omit or undervalue? How, if at all, does it change the way you would approach the underlying substantive issues raised by the statute? Again, in answering this part of the question, you may discuss any of the claims put forward above, or other arguments that you think relevant, but remember to ground your analysis in the course material.
END OF EXAM
WRITE NOTHING AFTER TIME IS CALLED