Columbia University School of Law
Economic Reasoning and the Law (L6569)
Professor Avery Wiener Katz
Final Examination
Wednesday, May 3, 2000
10 am — 1 pm
Instructions
Good luck on the exam; and for those of you graduating at the end of the term, best wishes. I will post grades on the class website as soon as they are ready, and will post a feedback memo as soon as possible after that.
Please do not turn the page until the exam proctor gives the signal.
QUESTION 1 (90 minutes, 50% of exam)
In McKichan v. St. Louis Hockey Club, 967 S.W.2d 209 (Mo. Ct. App. 1998), a professional hockey goaltender playing for the Milwaukee Admirals, a minor league affiliate of the National Hockey League's Vancouver Canucks, sued the owner of an opposing team, the Peoria Rivermen, to recover for injuries resulting from an illegal body check administered by an opposing player several seconds after the referee's whistle had blown.
The court described the incident leading to the plaintiff's injury as follows:
[Earlier in the game,] an incident took place between plaintiff and defendant player. Plaintiff was penalized as a result of that incident. During the third period, plaintiff and defendant player were both playing and "on the ice." A videotape of the incident discloses that defendant player was skating near center ice and plaintiff was positioned in front of his goal. The hockey puck was shot in the general direction of plaintiff's goal by defendant player's teammate. However, it traveled over the goal and the boards and out of play. As the puck was traveling, plaintiff skated several yards to the side of the goal.
A linesman blew his whistle stopping play. About this time, plaintiff began turning his body toward the boards [a wall of clear plexiglass surrounding the ice rink] and moved closer to them. As plaintiff was moving away from the goal, defendant player was skating from the near blue line [about 50 feet away] toward plaintiff.
Defendant player continued skating toward plaintiff after a second whistle. Holding his stick, defendant player partially extended both arms and hit plaintiff with his body and the stick, knocking plaintiff into the boards. Plaintiff fell to the ice and was knocked unconscious. Defendant player received a "match penalty" from the referee and was suspended for a period of games by the [league].
The injured player also sued the opposing player who charged into him, who filed a counterclaim. Three weeks
before trial, however, the players dismissed their claims against each other with prejudice. The case proceeded
against defendant under a vicarious liability theory and a jury awarded plaintiff $175,000. The trial court entered
judgment on this jury verdict, and at the same time granted the defendant owner's motion for a directed verdict
on the goaltender's separate claim for punitive damages. Both the owner and the goaltender appealed. The Missouri
Court of Appeals held that because the check was within the scope of risks inherent to the game, the goaltender
had no cause of action against the owner.
In explaining its decision, the court stated:
Rough play is commonplace in professional hockey. Anyone who has attended a professional hockey game or seen one on television recognizes the violent nature of the sport. In order to gain possession of the puck or to slow down the progress of opponents, players frequently hit each other with body checks. They trip opposing players, slash at them with their hockey sticks, and fight on a regular basis, often long after the referee blows the whistle. Players regularly commit contact beyond that which is permitted by the rules, and, we are confident, do it intentionally. They wear pads, helmets and other protective equipment because of the rough nature of the sport.
Professional hockey is played at a high skill level with well conditioned athletes, who are financially compensated for their participation. They are professional players with knowledge of its rules and customs, including the violence of the sport. In part, the game is played with great intensity because its players can reap substantial financial rewards. We also recognize that the professional leagues have internal mechanisms for penalizing players and teams for violating league rules and for compensating persons who are injured.
In summary, we find that the specific conduct at issue in this case, a severe body check, is a part of professional hockey. This body check, even several seconds after the whistle and in violation of several rules of the game, was not outside the realm of reasonable anticipation. For better or for worse, it is "part of the game" of professional hockey. As such, we hold as a matter of law that the specific conduct which occurred here is not actionable.
Write an essay critiquing the McKichan case from the viewpoint of law and economics. In your essay, you should discuss the following questions, as well as any other economic or regulatory issues that seem relevant: Is the court's deference to the hockey league's internal mechanisms for enforcing its rules appropriate or misplaced? What consequences, if any, does such a rule of law have for the incentives of players, team owners, and anyone else connected with the sport to take appropriate precautions against injury? What are the consequences for risk-bearing, for the allocation of resources between hockey and other activities, and for the welfare of players, team owners, sports fans, and the larger society?
QUESTION 2 (90 minutes, 50% of exam)
In his article, Increasing The Supply of Transplant Organs: The Virtues of a Futures Market, 58 Geo.
Wash. L. Rev. 1 (1989), Lloyd Cohen proposes the establishment of a futures market in which healthy individuals
would have the opportunity to contract for the sale of their organs or body tissue for delivery after their death.
Under his proposed scheme, if a donor's organs or tissue turned out to be harvested and transplanted, a payment
would then be made to her estate or designee. (The latter possibility would allow the donor to borrow against or
sell her right to such payment in order to obtain funds usable during her lifetime.) The hospital or facility in
which such a donor died would be treated as a bailee of valuable property, and would be obligated to preserve the
donor's cadaver in a manner suitable for organ harvesting and to notify the purchaser of the donor's condition.
Cohen's proposal goes only to using the market to increase the supply of organs, not to allocate them to recipients.
He allows for the possibility that harvested organs could be purchased by a state agency, by a regulated health
care facility, or by an unregulated private entrepreneur, and that they could then be allocated to recipients by
bureaucratic procedures, a lottery (or by the market, though he does not argue for this last possibility.)
Cohen argues that his proposal is both ethically acceptable and superior to other alternatives, including a pure
system of voluntary donation, a rule of escheat or presumed consent as currently applied in several European countries
(in which the bodily remains of anyone who did not specify the contrary would automatically become property of
the state, who would then delegate the right to harvest organs for transplant), and the required-request system
in place in the US, under which physicians are required by regulatory mandate to ask the next of kin if they wish
to donate organs of the deceased. In his view, a futures market would provide superior incentives to donors, physicians,
hospitals and next of kin to participate and acquiesce in the process of organ retrieval. In addition, it would
avoid
three potential ethical and political pitfalls. First, because there will be no acquisition of organs from live donors, it does not raise the spectre of exploiting the poor. Second, because the market need not be used to allocate the harvested organs, the rich need have no greater access than the poor. Finally, because people will be selling their own organs, their next of kin will not be required to traffic in the decedents' remains.
Cohen goes on to consider and reject the objections that a futures market would discourage the charitable donation of organs, that it would encourage murder or suicide, that it would impose moral or spiritual externalities on third parties, and that it would be degrading to human dignity. With regard to the last consideration, he notes that under the current system "tens of thousands of individuals are suffering and dying while the organs that could restore them to health are disposed of like carrion." He concludes:
The solution to this tragic problem is neither overly difficult, nor does it require a moral revolution. Instead of diminishing people's property rights in their bodies, we need to expand those rights and to allow individuals to make prospective sales of their organs . .
Write an essay critiquing Cohen's proposal from the perspective of the economic approach to law, and that makes use both of the economic tools that we developed throughout the semester, and the criticisms of law and economics that we discussed at the beginning and end of the course. Specifically, you should address the questions: (1) Viewed from within the economic paradigm, would Cohen's proposal have the desirable effects he suggests? (E.g., are such effects predicted by the economic analysis of property rights? Would a mixed system that did not use market mechanisms on the demand side — i.e., to allocate organs to recipients — work effectively on the supply side?) (2) Viewed from outside the economic paradigm, would it be socially, politically, or ethically acceptable? (E.g., which if any of the critiques that we discussed bear on this issue? Do they bear equally on the supply as on the demand side of the issue?)