Remarks: a public law perspective.

• Author: Melamed, A. Douglas
• Position: Property Rules, Liability Rules, and Inalienability: A Twenty-Five Year Retrospective

1. Douglas Melamed([dagger])

The original article that Guido and I wrote,(1) and its progeny insofar as I am familiar with it, address issues of private law. By contrast, I have spent most of the time since the article was written dealing with matters of public law, first in private practice and recently in the Justice Department. Most of those matters have involved antitrust law, which is fundamentally concerned with ameliorating or preventing market power and thus, in the parlance of this meeting, avoiding or minimizing the risk of holdout problems. Antitrust law is, in that sense, fundamentally, in aid of property rules. Ironically, the antitrust agencies have in recent years increasingly thought it necessary to employ what I have elsewhere called "regulatory" remedies,(2) many of which would here, I think, be called "liability rule" remedies.

Not surprisingly, in light of my experience, I read the papers and listened to the comments this morning from the perspective of someone who has spent the bulk of his life dealing with issues of public law. I thought I would take a few minutes to share some reactions from that perspective.

Rule 4 is alive and well -- at least in Washington. As everyone knows, the traditional private law litigation process does not readily lend itself to Rule 4, particularly where there are large numbers on the plaintiff/victim/payor side, and Rule 4 is thus not common in the private litigation context. The notorious exception, the Spur Industries case,(3) did not have a large number problem; maybe that is why it was able to find a use for Rule 4.

The government can overcome the large number problem, as it does in the paradigmatic eminent domain case. That much is obvious. What is perhaps less obvious is that, in the public law domain, the government uses Rule 4 all the time. For example, television broadcasters are in effect required to give up what many had thought to be their preexisting entitlement to broadcast violent programming if their viewers want to see it and their advertisers are willing to sponsor it; as compensation, the broadcasters are given free use of additional spectrum to accommodate the transition to the digital age. In a similar vein, the 1996 Telecommunications Act requires local telephone companies to make their facilities available to their would-be rivals in local telephony and compensates the phone companies by permitting them to enter into the long distance business that had previously been foreclosed to them.(4) And, in at least two recent instances, the Federal Trade Commission has compromised the right of private entities to carry on their businesses by assuming oversight authority over them -- in one case, a blank check to impose divestiture or other injunctive remedies as...