Age of Unreason: Rationality and the Regulatory State

A curious phenomenon, not previously remarked, appears in current international and interstate cases in a common configuration. These are cases in which a nonresident sues a company at the company’s home; the plaintiff would almost certainly win there on stipulated facts; and judgment is for the defendant as a matter of law. In cases in this familiar configuration it appears that courts will struggle to find rationales. Judges attempt to rely on arguments which ordinarily would be serviceable, but which, in cases so configured, seem to become irrational.

Because the relevant configuration of cases is common, the problem is widespread. And it is serious. A judgment unsupported by good reasons will appear to be a naked preference for the judgment winner. The Supreme Court has held that the bare appearance of a want of neutrality is a denial of due process.

Many cases are cited, but this Article focuses on two recent examples, seemingly unrelated. The first example is a prominent international case in the United States Supreme Court, raising an issue of statutory construction. The second is an interstate case in a state supreme court, raising an issue of choice of law. But these disparate examples are importantly similar in that both are in the above-described configuration, and in both, the trial court withholds its own law.

And in both, the court has trouble finding rational support for the outcome. This difficulty seems to be virtually inevitable in cases so configured. Critical and explanatory analyses are offered. The interstate example also raises a special problem of legal theory, discussed here as well.