Lack Of Exposure To Consequences Presents A Moral Hazard.
The Hon. Alex Kozinski, retired from the Ninth Circuit, and now an expert on moral hazard, has written an intriguing article in today's Friday, January 25, 2019 Wall Street Journal. The article is entitled, "How a Pointless Lawsuit Took Off."
The lawsuit involved Rahinah Ibrahim, a Malaysian national and Stanford doctoral candidate, who discovered that she was on the government's no-fly list, barred from U.S. airlines and airspace. It was all a horrible mistake, an error resulting from a government agent who misread a form. But the government fought Ms. Ibrahim's efforts to be removed from the no-fly list for 14 years. According to Kozinski, "government officials knew about the mistake almost from the day of her arrest."
Aside from the cost of time, effort, and emotional resources, the case consumed $3.6 million in attorney's fees. Kozinski argues government lawyers face no reality check: "Their salaries get paid regardless of outcome, and the costs of litigation are picked up by the taxpayers. . . Litigating for the government thus poses a moral hazard for lawyers: A victory, no matter how Pyrrhic, delayed or pointless, enhances their careers, whereas a loss -- even a finding of bad faith -- carries little risk."
Kozinski's modest proposal is that the Equal Access to Justice Act, under which Ms. Ibrahim's laywers will get paid, absent a showing that the government's position "was substantially justified," be amended to stick government attorneys with personal responsibility for some share -- say 1% -- of the attorney's fees, upon a finding of bad faith.
If Kozinski's proposal is enacted into law, we see a new cottage industry springing up. Courts will be forced to decide whether government attorneys acted in good faith as zealous advocates, or whether they were naughty and acted in bad faith. Every contentious case that government attorneys lose will potentially become an opportunity to tap the attorneys for some amount of fees -- one more reason not to work in the public sector. And we will have to create a new sidebar category on this blog for government attorneys.
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