Queues in Law

• Author: Ronen Perry & Tal Z. Zarsky
• Position: Professor, Faculty of Law, University of Haifa/Associate Professor, Faculty of Law, University of Haifa
• Pages: 1595-1658

Queues in Law Ronen Perry  & Tal Z. Zarsky  INTRODUCTION .................................................................................... 1596 I. FAIRNESS .............................................................................................. 1602 A. O VERVIEW ...................................................................................... 1602 B. P OSITIVE F AIRNESS ......................................................................... 1603 C. N ORMATIVE F AIRNESS ..................................................................... 1608 1. Equality: The Negative Aspect ............................................. 1608 2. Equality: The Positive Aspect ............................................... 1611 3. Desert .................................................................................... 1614 II. EFFICIENCY ........................................................................................... 1620 A. O VERVIEW ...................................................................................... 1620 B. FIFO’ S A LTERNATIVES .................................................................... 1621 C. I MPACT ON R ECIPIENTS .................................................................. 1623 1. Ex Post Effects ........................................................................ 1624 2. Ex Ante Effects ....................................................................... 1626 D. T RANSACTION AND A DMINISTRATIVE C OSTS .................................... 1630 E. I NCENTIVIZING THE A LLOCATOR TO E XPAND THE R ESOURCE ............ 1637 F. B ROADER S OCIAL B ENEFITS ............................................................. 1641 III. EVASION ............................................................................................... 1644 A. O VERVIEW ...................................................................................... 1644 B. W EALTH -B LIND E XCEPTIONS .......................................................... 1644 1. Consent ................................................................................. 1644 2. Special Need ......................................................................... 1646 3. Merit ...................................................................................... 1649 4. Special Skill ........................................................................... 1651  Professor, Faculty of Law, University of Haifa.  Associate Professor, Faculty of Law, University of Haifa. The authors are grateful to Gregory Alexander, Alfred Brophy, Emanuela Carbonara, Lee Fennell, Andrew Gold, Eric Goldman, Gregory Keating, Michael Krauss, Dan Markel, Robert Rabin, Lawrence Solum, Lior Strahilevitz, Avishalom Tor, Eyal Zamir, and participants in the Notre Dame Law School LAMB Conference, EMLE Conference at the University of Hamburg, and the University of Haifa faculty of law workshop, for valuable comments on earlier drafts, and to Alon Agmon and Talya Ponchek for research assistance. We are also indebted to the editors of the Iowa Law Review for their remarkable work on this Article. 1596 IOWA LAW REVIEW [Vol. 99:1595 C. W EALTH -R ELATED C IRCUMVENTION S TRATEGIES ............................ 1652 1. Fairness and Values .............................................................. 1652 2. Efficiency ............................................................................... 1654 CONCLUSION ....................................................................................... 1657 INTRODUCTION The Pacific Telegraph Act of 1860, which was intended to facilitate communication between the Atlantic and Pacific states, provided that received messages “shall be impartially transmitted in the order of their reception, excepting that the dispatches of the government shall have priority.” 1 In doing so, the Act introduced a “first come, first served” (“FCFS”) rule, also known in queuing theory as the “first in, first out” principle (“FIFO”), with a limited exception. FIFO is an allocation method in which resources are apportioned/distributed to interested parties in their order of entry. 2 The compensation fund, established by BP in partial fulfillment of its obligations under the Oil Pollution Act following the Deepwater Horizon oil spill, 3 provides a contemporary manifestation of the same FCFS/FIFO principle, with a different exception. Kenneth Feinberg, the fund’s administrator, stated, “claims are processed in a single queue that operates on the principle of ‘first in, first out’ and that claimants confronting financial need are the only ones who can skip to the front of the line.” 4 Likewise, the Uniform Commercial Code (“UCC”) provides that conflicting security interests in the same collateral rank according to priority in time of filing or perfection, namely on a FIFO basis, but recognizes a consent-based exception. 5 Finally, in Pierson v. Post , 6 one of the foundational readings in every property law class, 7 the court applied a variation of the 1. Pacific Telegraph Act of 1860, ch. 137, § 3, 12 Stat. 41, 42. 2. See, e.g. , Neil MacCormick, Norms, Institutions, and Institutional Facts , 17 LAW & PHIL. 301, 305 (1998) (explaining the meaning of FIFO). 3. See Ronen Perry, The Deepwater Horizon Oil Spill and the Limits of Civil Liability , 86 WASH. L. REV. 1, 3–4, 54 (2011) (discussing the Deepwater Horizon incident and its legal implications). 4. Sasha Chavkin, Gulf Spill Victims’ ‘Escalated’ Claims Still Languishing , PROPUBLICA (Oct. 25, 2010, 9:38 AM), http://www.propublica.org/blog/item/gulf-spill-victims-escalated-claims-still-languishing. 5. U.C.C. §§ 9-322(a)(1), 9-339 (2011); see also 4 JAMES J. WHITE & ROBERT S. SUMMERS, UNIFORM COMMERCIAL CODE § 33-3 (6th ed. 2010) (“First in time, first in right—that general rule runs like a golden thread through virtually all priority schemes . . . .”). 6. Pierson v. Post, 3 Cai. 175 (N.Y. 1805). 7. See Alfred L. Brophy, Introduction: A Famous Fox, a Surfacing Whale, and the Forgotten Slave , 27 LAW & HIST. REV. 145, 146 (2009) (“[E]ach year tens of thousands of first year law students read Pierson v. Post . . . .”). 2014] QUEUES IN LAW 1597 FIFO principle—the rule that property in wild animals is acquired by first occupancy—to decide between competing claims to property. As noted, FIFO allocates resources to interested parties in their order of entry. 8 Although the introductory illustrations imply that FIFO is an omnipresent and overarching principle in the law, the legal literature has never recognized or analyzed it as such. 9 This Article aims to fill this surprising theoretical gap. The Article makes three contributions to the literature. First, it constructs an innovative and comprehensive theoretical framework to assess FIFO’s role in resource allocation, integrating several dimensions of fairness and efficiency. Second, this Article highlights the prevalence of FIFO in law by analyzing and critically evaluating its role in a wide array of legal contexts. Third, this Article substantiates a jurisprudentially provocative thesis: While FIFO can be similarly applied in numerous contexts, it has no consistent set of justifications for all applications. Its rationalization in law must be highly varied and context-specific. We shall now elaborate on each contribution. The first and main purpose of this Article is to provide a theoretical framework for evaluating FIFO-based rules and practices, their exceptions, and their real-life operations. FIFO plays a significant role in allocating resources in everyday life. 10 Thus, it has been studied in many disciplines, including economics, psychology, sociology, political science, engineering, computer science, telecommunications, and operations research. 11 It has occupied the minds of some of the most prominent scholars of our era, such as mathematician J.F.C. Kingman, 12 operations researcher Richard Larson, 13 social psychologist Stanley Milgram, 14 political philosopher Michael Sandel, 15 and economist Donald Wittman, 16 to name but a few. However, non-legal studies have usually addressed very specific applications of FIFO from distinct methodological perspectives, without attempting to provide a 8. See, e.g. , MacCormick, supra note 2, at 305 (explaining the meaning of FIFO). 9. There is seemingly one exception. Dean Lueck briefly enumerates FIFO’s manifestations in various legal contexts. Dean Lueck, The Rule of First Possession and the Design of the Law , 38 J.L. & ECON. 393, 394 (1995). However, his model focuses on first-possession—a very limited application of FIFO—and analyzes it only from an economic perspective. 10. See DONALD GROSS ET AL., FUNDAMENTALS OF QUEUEING THEORY 4 (4th ed. 2008) (observing FIFO’s prevalence in everyday life); Donald Wittman, Efficient Rules in Highway Safety and Sports Activity , 72 AM. ECON. REV. 78, 78 (1982) (same). 11. See GROSS ET AL., supra note 10, at 2–3 (reviewing applications of queuing theory). 12. J.F.C. Kingman, The Effect of Queue Discipline on Waiting Time Variance , 58 MATHEMATICAL PROC. CAMBRIDGE PHIL. SOC’Y 163 (1962). 13. Richard C. Larson, Perspectives on Queues: Social Justice and the Psychology of Queueing , 35 OPERATIONS RES. 895 (1987). 14. Stanley Milgram et al., Response to Intrusion into Waiting Lines , 51 J. PERSONALITY & SOC. PSYCHOL. 683 (1986). 15. MICHAEL J. SANDEL, WHAT MONEY CAN’T BUY: THE MORAL LIMITS OF MARKETS 17–41 (2012) (discussing the ability to jump queues). 16. Wittman, supra note 10. 1598 IOWA LAW REVIEW [Vol. 99:1595 comprehensive and integrative theory of its justifications and limitations. And while non-legal literature on FIFO is overly concrete, the legal literature on the subject is scant, partly because legal theorists have failed to recognize FIFO’s high prevalence in substantive law and legal practice beyond the limited area of first possession as the root of title. 17 Even this limited application has not been thoroughly examined...