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July 16, 2009

Sotomayor Testimony on Business Cases

Judge Sotomayor, discussing business cases, noted that business "needs certanty" in the law.  This is correct as noted here as far as it goes. Uncertainty has to be negatively priced in deals on both sides and is a net social loss.   The certainty of a bad rule may be worse than the uncertainty around a potentially good rule if the bad rule cannot be mitigated by planning however.  Moreover,  the saying means on thing for intermediate courts (do not attempt to open up or reshape the law) and another for the Supreme Court (that, by virtue of being the final court) can bring certainty and reshape the law at the same time.  The testimony is close to meaningless. What judge would come out in favor of "uncertainty in business law"? 

July 16, 2009 | Permalink

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