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An economic analysis of search and seizure law.

This Article uses economic concepts to understand search and seizure law, the law governing government investigations that is most often associated with the Fourth Amendment. It explains search and seizure law as a way to increase the efficiency of law enforcement by accounting for external costs of investigations. The police often discount negative externalities caused by their work. Search and seizure law responds by prohibiting investigative steps when external costs are excessive and not likely to be justified by corresponding public benefits. The result channels government resources into welfare-enhancing investigative paths instead of welfare-reducing steps that would occur absent legal regulation. This perspective on search and seizure law is descriptively helpful, it provides a useful analytical language to describe the role of different Fourth Amendment doctrines, and it facilitates fresh normative insights about recurring debates in Fourth Amendment law.
INTRODUCTION
I.   AN ECONOMIC MODEL OF SEARCH AND SEIZURE LAW
     A. The Negative Externalities of Police Investigations
     B. Criminal Investigations as a Principal-Agent Problem
        1. The Principal's Interests
        2. The Utility Function of the Police as Agents
           a. Internal Costs, [C.sub.1]
           b. Public Benefit, P*V
           c. External Costs, [C.sub.e]
     C. The Economic Role of Search and Seizure Law
     D. A Fourth Amendment Example
     E. Difficulties of Measurement and the Need for Categorical Rules
II.  AN ECONOMIC UNDERSTANDING OF FOURTH
     AMENDMENT RIGHTS
     A. Searches and Seizures
        1. Searches
        2. Seizures
     B. Equilibrium-Adjustment and the Problem of Technological Change
     C. Constitutional Reasonableness: The Warrant Requirement
        and Its Exceptions
        1. The Warrant Requirement
        2. Exceptions to the Warrant Requirement
III. AN ECONOMIC UNDERSTANDING OF FOURTH
     AMENDMENT REMEDIES
     A. An Overview of Fourth Amendment Remedies
     B. The Narratives of Fourth Amendment Remedies
     C. Economic Critiques of the Exclusionary Rule
        1. Richard Posner on Civil Remedies
        2. Hugo and Sue Mialon and Incentives to Commit Crimes
        3. Tonja Jacobi and Juror Reactions
     D. Civil Remedies
IV.  USEFULNESS OF THE ECONOMIC UNDERSTANDING OF
     SEARCH AND SEIZURE LAW
     A. The Descriptive Benefit
     B. The Analytical Benefit
     C. The Normative Benefit
        1. Introduction to the Crime-Severity Debate
        2. Insights of the Economic Model
        3. Better and Worse Contexts for Crime-Severity
DISTINCTIONS
CONCLUSION


INTRODUCTION

Although economic analysis plays an important role in many areas of legal scholarship, (1) the law of search and seizure remains a notable exception. Search and seizure law is the part of criminal procedure that addresses limits on government collection of evidence. It consists primarily, although not exclusively, of judicial interpretations of the Fourth Amendment. (2) The scholarship in the field is vast but predominantly doctrinal, (3) focusing heavily on lawyerly considerations such as doctrinal coherence and the correct way to apply legal principles. (4)

Economic analysis has made few inroads into the dense doctrinalism of search and seizure law scholarship. Before his untimely death, William Stuntz used informal economic insights to critique various aspects of Fourth Amendment law.(5) In recent years, a handful of scholars have used economic approaches to analyze specific doctrines. (6) But economic analysis remains fairly rare and generally isolated in search and seizure law scholarship. (7) The Zeitgeist is that economics has little to say about search and seizure law--and that whatever it says isn't very useful.

This Article presents a different view. It argues that economics provides a surprisingly helpful lens to understand and critique search and seizure law. This field of law can be understood as a way to maximize the benefits of criminal law while minimizing the costs of its enforcement. The criminal justice system exists to achieve policy goals such as deterrence, incapacitation, and retribution. (8) But achieving those goals requires enforcement, and enforcement requires the collection of evidence to prove cases in court. Search and seizure law helps to lower the costs of enforcing the law by blocking investigatory steps that would impose high externalities unlikely to be accounted for by law enforcement. (9)

At first blush, it may seem odd to think of search and seizure law as a way to limit costs. Search and seizure scholarship is mostly about the Fourth Amendment, which is generally thought to protect privacy rather than encourage efficient government. (10) The cases speak of rights, not costs. (11) But the costs of investigations are only rarely pecuniary, and it can be helpful to understand invasions of rights as the forced imposition of nonpecuniary costs. To collect evidence, the police break down doors and ransack property in a search for proof beyond a reasonable doubt. (12) They place suspects under surveillance, invading their privacy. They place suspects under arrest, infringing their freedom of movement. (13) All of these investigatory techniques impose costs on society, not only on suspects but also on their families and the communities in which they live. The effect is something like a coal-burning plant that pumps pollution into the atmosphere. Police investigations impose societal costs in the form of civil liberties violated, property destroyed, and peace and stability disrupted.

From this perspective, search and seizure law is a way to account for investigative externalities and impose a rough cost-benefit test. The police act as agents of the public, investigating cases on the public's behalf. But for reasons of both political economy and sociology, the police are unlikely to account fully for the societal harms that their investigations can impose. (14) Search and seizure law can constrain the police by aligning police action with the public interest. The law can prohibit police action when its societal costs are likely to exceed its public benefits. The result can channel law enforcement resources into welfare-enhancing investigative alternatives instead of the welfare-reducing investigations that would result absent legal regulation. (15)

Developing an economic understanding of search and seizure law is useful in three related ways. First, it provides a functional account of existing doctrine. Search and seizure law is notoriously undertheorized; Fourth Amendment law in particular has been condemned as "a mess," (16) "an embarrassment," (17) and "a mass of contradictions." (18) Economics provides a useful perspective from which to understand the role that various doctrines might serve. Second, an economic perspective can provide a helpful shared language to discuss and critique existing doctrines. Search and seizure law often lacks a shared vocabulary, and widely used terms and concepts are themselves contested. (19) Economics can provide a clearer language to express concepts and understand doctrines. Third, economic analysis provides a normative framework that can advance longstanding scholarly debates. A careful study of one such debate, whether Fourth Amendment law should recognize crime-severity distinctions, (20) provides an example of how economic modeling can advance existing understandings.

The economic approach advanced in this Article does not provide the only way to understand search and seizure law. History, text, precedent, and other normative theories of constitutional and statutory interpretation all retain their longstanding importance. Nonetheless, the economic understanding of search and seizure law has significant explanatory power. It can introduce a helpful shared language, and it can provide a useful set of normative tools.

This Article contains four parts. Part I introduces an economic model of investigative criminal procedure law in general, and search and seizure law in particular. Part II shows how existing Fourth Amendment doctrine roughly fits the economic model articulated in Part I. Part III evaluates whether existing Fourth Amendment remedies fit the theory. Finally, Part IV considers the benefits of the economic approach, focusing on how it can generate fresh insights about existing academic debates.

I. AN ECONOMIC MODEL OF SEARCH AND SEIZURE LAW

This Section develops an economic model of criminal investigations and the role of search and seizure protection within it. The Section begins by exploring the negative externalities of criminal investigations, and then turns to the principal-agent problem raised by police enforcement. It then focuses on the functional role of search and seizure law, explaining how the law can enforce a rough cost-benefit standard that can lower the costs of criminal investigations.

A. The Negative Externalities of Police Investigations

Gary Becker's celebrated article Crime and Punishment: An Economic Approach famously offered an economic approach to the enforcement of criminal laws. (21) Becker noted that achieving the utilitarian benefits of criminal law requires enforcing the law. The mere existence of criminal laws has little effect. (22) To achieve the benefits of the law, the government must hire, train, and equip police officers to investigate and enforce the laws. (23) Becker then considered the optimal level of law enforcement as a function of the overall marginal cost of enforcement and the marginal benefit of enforcement. (24)

Despite its canonical status, Becker's article contains a significant oversight. Becker assumed that the costs of law enforcement are limited to internal expenses shown in the law enforcement budget such as hiring, training, and equipping officers. (25) Not so. The costs of criminal investigation also include externalities imposed by investigators on suspects and the public. Once hired and trained, officers must gather evidence to prove crimes beyond a reasonable doubts. (26) They must conduct surveillance with the hope of observing criminal activity so they can testify about it in court. They must seize evidence and take it into police custody so they can show it to the jury to prove their cases. And they must arrest suspects and take them into custody so the suspects will appear at trial as defendants.

When the police take these steps, they necessarily impose costs and harms on others. Surveillance invades privacy, disrupting a sense of peace and chilling legitimate activities. (27) Some investigative steps are violent, destructive, and costly, such as breaking down a door and rifling through an apartment in a search for evidence. (28) Arresting a suspect violates his autonomy and freedom, often depriving his family and children of stability and support. (29) Even lesser steps such as stopping a suspect on the street can be a deeply humiliating experience, not only inconveniencing targets but also angering them and their family and friends for being targeted by law enforcement. (30) An economic model of criminal law enforcement must account for these costs.

In the language of economics, investigations create negative externalities. The external costs of enforcement can be roughly analogized to the pollution emitted from a coal plant. A company owns a plant that emits pollution, imposing a cost borne by the public instead of the company. Because the company does not internalize the cost of the pollution, it has an incentive to burn more coal than is desirable. The company will continue to burn coal even when its societal costs exceed its benefits because the company will continue to profit from it. The law may then impose a tax on production to internalize the cost. (31)

Similarly, the "pollution" of criminal investigations is not borne by the police. Instead, it is borne by the public that is subjected to searches, seizures, and surveillance. Much like the company would burn more coal if its costs did not include environmental harms, the police may likewise engage in more invasive investigative techniques than are desirable if they do not account for the external costs.

B. Criminal Investigations as a Principal-Agent Problem

The modern approach to enforcing criminal laws is through investigations by police officers, detectives, and agents, who are government employees tasked with collecting evidence. The role of search and seizure law can be helpfully understood as a response to a principal-agent problem created by this arrangement. (32) The public, acting through its elected officials, hires the police to investigate and solve crimes to achieve benefits such as deterrence, retribution, and incapacitation. (33) Although identifying the public interest in police enforcement requires assessing the external costs of investigations, there are good reasons to suspect that the public's agents will undervalue those costs. (34) The divergence between the interests of the principal and those of its agent explains the role of search and seizure law.

1. The Principal's Interests

Consider the cost and benefits of investigative steps from the perspective of the public. The net benefit of any particular investigative step can be described as [P.sup.*] V - [C.sub.i] - [C.sub.e], where P represents the increase in probability that the crime will be solved and successfully prosecuted, V represents the net value of a successful prosecution resulting from deterrence and incapacitation, [C.sub.i] represents the internal costs of the investigative step, and [C.sub.e] represents its external costs. (35) Considered together, [P.sup.*] V - [C.sub.i] [C.sub.e] represents the net public benefit from the expected decrease in crime that results from any investigative step. The public's interest is to maximize this figure over all of the investigative steps, N, that are feasible using the resources available to law enforcement.

Let's take a closer look at each of these variables. P represents the increase in probability that the evidence needed to prosecute the crime will be discovered as a result of the technique. Investigative methods vary widely in their effectiveness. A low P means that the method does not increase the chance of solving the case very much, while a high P means that the method is more likely to solve the crime. (36) V represents the value of successfully prosecuting that particular case. It consists of the prosecution's deterrent effect (the extent to which punishment for the crime will make real the threat of future punishment and discourage future crimes), plus its incapacitative effect (the extent to which punishment may inhibit the wrongdoer's ability to commit future crimes), minus the cost of the punishment itself. In general, more serious crimes should be associated with a higher V. (37)

Internal costs C, include two relatively distinct groups of costs. First, some internal costs are those borne by the government as a whole, as seen from the perspective of the police chief or policymakers overseeing the budget. These costs include the government's cost of training the police, equipping them with squad cars, and paying their salaries and benefits. Second, there are additional internal costs from the perspective of individual police officers. Such costs may include the time and effort an officer spends investigating a case, or the emotional and possible physical harm he experiences from a threat to his safety in a dangerous investigation.

The relationship between these two kinds of internal costs can vary considerably from case to case. If an officer is badly injured on the job, the injury will increase costs both to the individual officer employee and the government employer (through greater healthcare costs and disability benefits). In other cases, however, the two kinds of costs have an inverse relationship. Imagine the police department buys an expensive new surveillance tool that makes it more convenient and less time-consuming for officers to conduct a particular kind of surveillance. The new tool would raise the first kind of internal cost because the government would have to buy the expensive equipment but then decrease the second kind of internal cost by making the surveillance less time-consuming for officers.

Finally, [C.sub.e] represents the external costs of the investigative step. These costs include privacy harms and property losses that result from an investigation that is imposed on a suspect. They also include the loss of autonomy and freedom imposed directly on the subject of the investigation (who may be guilty or innocent) as well as his family or associates. (38) Taking a more expansive view, such costs can include more diffuse burdens imposed on the community at large. For example, a police raid on a neighborhood might trigger feelings of insecurity or danger. Additionally, a strong police presence in a high-crime community can cause widespread feelings of resentment or fear. (39)

2. The Utility Function of the Police as Agents

Next consider the perspective of the police hired as agents of the public. The utility function of law enforcement is difficult to model with precision. The history of U.S. law enforcement includes a wide range of different kinds of police and agents, hired and trained in different ways, accountable to different superiors, in the context of very different law enforcement efforts. (40) Generalizations about what motivates the police will vary considerably across different eras, across different government agencies, and across investigations of different kinds of crime. (41)

My goal is more modest: merely identifying what kinds of costs and benefits are likely to be a more or less significant part of the utility function of most officers. Following this modest approach, a useful conclusion is that although officers will generally place significant value on internal costs [C.sub.i] and public benefit P*V, there is a considerable risk that they will systematically undervalue external costs [C.sub.e]. The risk of law enforcement undervaluing [C.sub.e] explains the role of search and seizure law.

a. Internal Costs, [C.sub.i]

First, officers will generally place a significant value on internal costs [C.sub.i]. This point is obvious for internal costs borne directly by individual officers. For an individual officer, internal costs will include the officer's own time, effort, and threats to his personal safety. The more time and effort a step takes, and the more it threatens the officer's safety, the less an officer will wish to engage in it. Like everyone else, officers consider their self-interest. They will likely weigh such costs carefully.

A similar point is likely true, although to a lesser extent, about internal costs imposed on the government as a whole as seen from the perspective of the police chief or other senior officials. (42) Individual officers in the field may not themselves care if a particular investigative technique drains the police budget or proves otherwise costly to the department. However, individual officers will be influenced at least to some extent by the policies and priorities of their bosses. (43) Police chiefs must staff cases, and they must distribute law enforcement resources within existing budgets. (44) By influencing choices about where police resources will go, costs imposed on the government will influence how the police behave.

b. Public Benefit, P*V

The police will also often place significant value on P*V. (45) Officers will often value solving cases, and they will generally value solving bigger cases more than solving smaller ones. There are two explanations for this: one based in public choice theory and the other based in sociology.

The explanation from public choice theory is that the elected politicians have strong incentives to pay close attention to the voices and interests of potential crime victims. (46) Crime is a salient issue for many voters and campaign donors who disproportionately represent potential victims of crime rather than suspects. (47) As a result, the efficacy of law enforcement matters deeply to many voters. (48) Politicians often respond to that pressure by striving to be "tough on crime," especially in response to more serious offenses. (49)

The reality that police departments are created, staffed, and run by elected officials or those appointed by elected officials leads to political pressure on officers to solve crimes. Police departments may require officers to bring in a certain number of arrests in a given period. (50) An officer who makes many arrests may also receive overtime pay for the subsequent court proceedings. (51) These incentives create utility to officers to solve crimes, and especially high-profile or more serious offenses. (52) From that perspective, solving crimes is only a good thing. As Donald Dripps writes, "Public choice theory suggests that an overwhelming preponderance of political incentives favor unrestricted enforcement of the criminal law." (53)

The sociological explanation is that many officers value solving cases because it gives them personal satisfaction and accrues prestige and respect among their peers. Officers are "engaged in the often competitive enterprise of ferreting out crime." (54) Taking down a major criminal can be a victory in that "competitive enterprise" that is valued by officers. (55) Many officers see themselves as there to protect the public from the criminal element preying on innocent victims. (56) Within that mindset, catching criminals is a win. The bigger the case, the bigger the win. Of course, not all officers will be so public-minded. Some will shirk their duties or have other agendas. But in general, making a major arrest will often be cause for personal satisfaction and respect among fellow officers. (57)

c. External Costs, [C.sub.e]

The third and final piece of the puzzle is the role of external costs. There are good reasons to think that, absent legal regulation, the police will pay comparatively less attention to external costs. In a world with no search and seizure law, officers will care less than they should about the harms their investigations inflict on civil liberties. As with consideration of P*V, this is true for reasons of both public choice theory and sociology.

The public choice argument for why police officers likely discount [C.sub.e] is the flip side of why they value P*V. Those who typically bear the external costs of investigations--criminal suspects and those who live with or near them--tend to be relative outsiders to the political processes. (58) They are outnumbered considerably by those who see themselves as victims of crime. (59) Criminal defendants are overwhelmingly young (60) and disproportionately poor, (61) and therefore are less likely than most to vote or donate to campaigns. (62) In many states, previously convicted felons cannot vote at all. (63) For these reasons, most elected officials have less incentive than they otherwise would to focus on the external costs typically borne by targets of investigations. (64) The legislative process disproportionately represents the interests of those who are potential crime victims rather than those who are potential criminal suspects. "Tough on crime" politicians become relatively insensitive to the external costs of investigations. Those incentives are passed on from politicians to the police, resulting in less attention to external costs by officers than the public interest would otherwise demand. (65)

The sociological explanation leads to the same result. Studies indicate that police officers often see the imposition of external costs on suspects as a public good instead of a social cost. (66) Experienced officers develop confidence in their ability to quickly identify criminals. (67) Studies suggest that at least some officers divide the public into three categories: criminals, troublemakers who do not deserve police respect, and the public at large. (68) Because officers focus their investigations on the first two groups, and many have an instinctive faith in their ability to identify their members, officers may come to see the external costs of investigations as an informal punishment inflicted on those who deserve them rather than an unfortunate byproduct of gathering evidence. In some cases, violating a suspect's privacy or security in the course of investigating crime might be seen as informal "street justice" that itself deters crime or punishes those who trouble or threaten the police. (69)

Political economy and sociological explanations point to the conclusion that police will often discount the external costs of their investigations absent search and seizure law. Officers will often weigh P*V against [C.sub.i], but they will tend to pay less attention to external costs [C.sub.e]. The officers' relative inattention to external costs creates a divergence between the interests of the principal and its agent.

C. The Economic Role of Search and Seizure Law

The divergence between the interests of the public and the police as their agents explains the role of search and seizure protections. Absent legal restriction, the police will discount external costs and take steps that seem desirable to officers but are welfare-reducing to society as a whole. Legal limits on investigative steps can change the officer incentives. By banning investigative steps when external costs would be excessive, search and seizure law forces the police to consider external costs that they might otherwise downplay or ignore.

The result is a rough cost-benefit rule. The law can prohibit steps when their likely societal costs would outweigh their likely societal benefits. This can channel law enforcement resources into welfare-enhancing investigative alternatives instead of the welfare-reducing investigations that would result absent legal regulation. Absent legal regulation, officers would have no incentive to try the welfare-enhancing alternatives. Search and seizure law can provide the incentives by banning welfare-reducing investigations.

Consider the Fourth Amendment, the most prominent source of search and seizure restrictions. The Fourth Amendment's basic mechanism is to condition certain investigative methods on a showing of specific factual predicates. Some investigative steps are not deemed searches or seizures, and are therefore outside Fourth Amendment regulation. (70) But other steps are labeled searches or seizures and are regulated in a specific way: in general, searches and seizures are deemed reasonable, and thus allowed, when the government can establish specific facts showing an expected law enforcement benefit, low external costs, or some combination of the two. (71) As will be developed in detail in Part II, the result is a body of law that selects investigative steps with high external costs in the usual case and subjects them to regulation, ideally allowing them only when the government can establish specific facts that either show low external costs in the circumstances or that the government has a countervailing expected benefit that justifies the imposition of external costs.

So understood, Fourth Amendment law can serve a channeling function in response to high external costs. When external costs are low, the law gives the police discretion to take those investigative steps subject to constraints of internal cost (set by law enforcement budgets) and perceived effectiveness. (72) When external costs are high, the law can prohibit such steps unless the police can make specific showings that the expected benefit outweighs the costs. (73) The law does not require the police to select the most beneficial investigative option. (74) But it can rule out investigative techniques that can be expected to inflict high external costs absent a specific showing of expected benefit. The law pushes investigative resources into welfare-enhancing alternatives.

D. A Fourth Amendment Example

A hypothetical is useful to show the potential welfare-enhancing role of search and seizure law. Imagine a necklace has been stolen from a jewelry store in a town with only ten houses. And assume the police know the necklace is in one of the ten houses. A search of the house with the necklace will reveal the necklace, identify the thief, and lead quickly to his guilty plea. Assume that society benefits thirty utils in the future from deterrence and incapacitation if the crime is solved and the thief is locked away. Further assume that forcibly breaking into any home and searching it will cost a total of five utils, which will consist of one util in internal police costs and four utils of external costs imposed on the community. The police have no reason to think the necklace is more likely to be in any one house than any other.

Consider what searches are in the public interest. If the only option is to forcibly search homes, the public interest is best served by no searches at all. Any search hurts the public interest because its expected cost will exceed its expected benefit. The cost is five utils, while the expected benefit is only three utils (a 10% chance of the necklace being in any one home multiplied by the thirty utils of benefit conferred by finding the necklace). The benefit to society (three) is smaller than the cost (five). The officers should not search.

The officers may not see it that way, however. Assume that the police ignore the external costs of their searches. In their calculation, the expected benefit of searching a home is still three utils. But because the officers are ignoring external costs, the cost of a search is only one util instead of five utils. Now searching always seems desirable: three is greater than one, so a search looks like a win every time. Note the difference between the public interest and the police perspective if the police ignore external costs. The officers will want to search every home until the necklace is found because the benefits outweigh the internal costs.

The picture changes, however, when we add consideration of Fourth Amendment law. The Fourth Amendment prohibits searching a home except under specific circumstances. (75) Two circumstances are particularly important. First, the police can search a home if they obtain the voluntarily consent of someone who lives or stays there. (76) As a result, the police can approach a particular home, knock on the door, and ask the homeowner for permission to search it. (77) If the person allows the search, the search is constitutional. Second, officers can search a home if they obtain a valid search warrant, which requires the police to establish probable cause that the evidence will be in the home and requires them to search only the home where the evidence is likely to be. (78) Under this option, they must first investigate the case and find reasons to believe that the necklace is in a particular home. If they can collect sufficient evidence, they can then go to a judge, obtain approval, and search the home.

These two investigative alternatives can change the public interest in a search. Consent searches have lower external costs because they occur with the homeowner's permission and without breaking down doors or otherwise shocking the homeowner. Let's say that if the officers ask for consent and the homeowner agrees and a search follows, the external cost of the search drops from the four utils without consent to only one util with it. Let's also assume that if the officers ask for consent there is a 50% chance that the homeowner will decline. If the homeowner declines, asking for consent has a very low internal cost of (say) one-tenth of a util.

Under this assumption, the option of lawful consent searches creates a net public gain. If the homeowner consents to a search, the consent search is a net gain because the three utils of benefit come at a cost of only two utils (one internal and one external). If the homeowner declines, the only loss was the one-tenth util of police internal cost from asking. Because the societal gain from the consenting homeowner is much greater than the equally likely loss from the objecting homeowner, asking for consent enhances public welfare.

Trying to obtain a search warrant can be similarly beneficial. Investigating the crime to try to develop the needed probable cause can direct the police to the house where the necklace is likely to be. If the police can get a warrant, the search will have a high expected benefit because there is a good chance the necklace is there. Let's add in some plausible numbers. Let's say that if police investigate the crime and seek probable cause that the necklace is in a particular house, the investigation will cost five utils of internal cost of the officers' time instead of the one util it costs to simply enter and search. Further, assume a 50% chance the officers can develop probable cause. If the police can establish probable cause, assume a two-thirds likelihood that the necklace will be found there when the house is searched pursuant to a warrant.

Under these assumptions, the option of investigating and obtaining lawful warrants also creates a net public gain. The expected payoff of an investigation is ten utils: a 50% chance of getting probable cause, which will enable a two-thirds chance of gaining thirty utils of public benefit. On the other hand, the expected cost is only 7.5 utils: five utils for the investigation, plus a 50% chance probable cause will be established and a five util cost search (four external utils and one internal util) will follow.

Of course, this example is highly stylized. But notice how the Fourth Amendment can channel investigators into welfare-enhancing investigative methods. The Fourth Amendment blocks the welfare-reducing investigative method (raiding each house without cause) in favor of methods that have either lower external costs (asking for consent) or higher expected benefit (investigating to try to get probable cause). The law blocks the harmful option and channels the police into paths that represent net societal gains. (79)

And here's the key: absent legal restriction, the police would have no incentive to take these steps. In a world without the Fourth Amendment, trying to develop probable cause would seem like a waste of effort and time. From an officer's perspective, searching a house costs only one util. Without Fourth Amendment law, officers would not want to spend five utils of their time and energy in an initial investigation just to have a 50% chance that they would have a two-thirds probability of finding the necklace. Similarly, from their perspective, asking for consent provides no benefit: it only adds cost. Search and seizure law can push officers to take steps in the public interest by imposing restrictions that account for external costs.

E. Difficulties of Measurement and the Need for Categorical Rules

The above example might suggest, at first blush, that an economic model of search and seizure law would be simple to apply. In an ideal world, we could tabulate costs and benefits of each step. The law could require the police to adopt the most welfare-enhancing strategy--or, at the very least, to choose among those that are welfare-enhancing--on a case-by-case basis. Imagine a hypothetical world in which the police carried around a sophisticated Externality-O-Meter that would exactly measure the externalities of every planned law enforcement step and require the police to pay the costs of that step before taking it. Use of the Externality-O-Meter would internalize the costs of investigative steps, allowing the police to make the most efficient use of resources.

Unfortunately, matters are not so simple in the real world. The variables P*V and [C.sub.e] for a particular law enforcement step in a particular investigation are difficult to measure ex post and exceedingly difficult to predict ex ante. As a result, search and seizure law relies heavily on categorical rules that reflect broad generalizations of costs and benefits over defined ranges of cases. (80) The categorical nature of search and seizure rules is sufficiently characteristic that it is worth pausing to reflect on the need for such rules and the choices that result.

First, measuring external costs is very difficult. Some kinds of external costs may be measured easily, such as the value of property destroyed when the police break down the door to search for evidence inside. (81) But most external costs of investigations are case-specific and are very difficult to quantify. For example, if the police search a family home and arrest the father for dealing drugs, the external costs might include the invasion of the family's privacy; the residents' lost sense of security; the interruption of family life; and the violation of the father's autonomy. An officer about to take an investigative step will be hard pressed to calculate its external cost accurately. (82)

The same is true with measuring P*V. The extent to which a particular investigative technique will actually increase the odds of proving a particular criminal case is difficult to know. In some cases, a search technique may be very effective; in other cases, the same technique will produce no evidence at all. The deterrent and incapacitative value of solving a particular case is also very difficult to measure. In general, we hope and expect criminal prosecutions to have such effects, as they are the forward-looking utilitarian justifications for punishment.^ But how much a particular investigative step will trigger such benefits is generally unknowable ex ante, and to what extent it achieved that goal is not readily measurable ex post.

Compounding the difficulty is the astonishing scale of criminal investigations in the United States. At present, state and federal agencies employ about 870,000 police officers and agents. (84) Law enforcement officers in the United States make about 13 million arrests a year, (85) and arrests cannot lawfully occur unless the officer has probable cause to think that a crime was committed and the officer has developed probable cause to think that the individual arrested committed it. (86) As a result, the number of individual law enforcement investigative steps actually or potentially subject to Fourth Amendment regulation is likely orders of magnitude higher.

Given the frequency of searches and seizures, and the difficulty in measuring the relevant variables to determine the cost-benefit of each, it is not surprising that Fourth Amendment doctrine is based heavily on categorical rules. (87) The Fourth Amendment prohibition on unreasonable searches and seizures can be divided into three questions: First, what is a search or seizure, and therefore subject to regulation? Second, when is a search or seizure reasonable, and therefore allowed? And third, what is the remedy for an unreasonable search or seizure? (88) With respect to each question, the doctrine is based heavily on categorical rules. (89) There are categorical rules governing the kinds of investigative steps that count as "searches" or "seizures," when searches or seizures are reasonable and therefore permitted, and what remedies can be imposed for violations. (90)

The categorical nature of most Fourth Amendment rules requires courts to choose how or whether to regulate investigative steps in ways that will have broad distributive effects. To see this, imagine a court must decide between regulating a particular investigative step by using either a permissive rule, which allows the police to take the investigative step with little or no legal regulation, or a restrictive rule, which allows the police to take the investigative step only under specific conditions such as a search warrant.

Under the permissive rule, the police will engage in the step in a set of cases that we can call [N.sub.p]. Under the restrictive rule, the police will engage in the step in a smaller set of cases we can denote [N.sub.r].

In choosing between two legal rules, a court could compare the sum of P*V--[C.sub.i]--[C.sub.e] over the steps [N.sub.r] (under the restrictive rule) to that sum over steps [N.sub.r] (under the permissive rule). If the step triggers high externalities and would be used often under the permissive rules, the sum of the public benefit over Nr would likely be greater than the sum over [N.sub.p]. In such a case, the restrictive rule would be preferable to the permissive rule, as it lowers the costs of enforcing the law by avoiding the high externalities under the permissive rule. On the other hand, if the step triggers only low externalities and would be used only rarely under the restrictive rule, then the permissive rule is likely preferable to the restrictive rule because the net benefit over [N.sub.p] likely exceeds that over [N.sub.r].

Importantly, courts can and often do reach this result intuitively. To decide between a permissive rule and a restrictive rule, a court might consider whether the permissive rule will lead (or has led) to widespread civil liberties abuses. Roughly speaking, abuses will signal cases with low P*V, serious abuses will mean a low P*V matched with a high [C.sub.e], and widespread abuses will mean a high [N.sub.p]. If the restrictive rule will put an end to serious, widespread abuses, the P*V--[C.sub.i]--[C.sub.e] over the steps Nr will likely be greater than P*V--[C.sub.i]--[C.sub.e] over steps [N.sub.p].

For an example of this intuitive reasoning, consider the Supreme Court's decision in United States v. United States District Court, where the Court considered whether a search warrant is required for domestic security wiretapping. (91) In choosing between the restrictive rule of a warrant and the permissive rule of no warrant, the Supreme Court compared the risk and seriousness of abuses, as well as the impact on legitimate government investigations, under both rules. (92) The Court concluded that a warrant was required because it would not substantially interfere with legitimate investigations but would significantly limit the serious risks of widespread government abuses. (93) Although expressed informally, the Court's analysis rests on a comparison of P*V--[C.sub.i]--[C.sub.e] over steps [N.sub.p] and [N.sub.r].

II. AN ECONOMIC UNDERSTANDING OF FOURTH AMENDMENT RIGHTS

This Part considers whether existing doctrine fits the theory. Focusing on the Fourth Amendment as the leading example of search and seizure law, it concludes that the contours of existing Fourth Amendment doctrine appear to fit the economic model relatively well. It can't be shown whether existing doctrine actually achieves the goals of the model. That would require empirical studies far beyond the scope of this Article and perhaps impossible to measure accurately. (94) Instead, this Part makes a more modest claim: the basic contours and features of existing Fourth Amendment doctrine fit what the model would predict about search and seizure law.

Fourth Amendment law fits the model with its two basic steps. First, Fourth Amendment law identifies police investigative techniques that in general will have high externalities. Next, the law conditions use of those techniques on a showing of specific facts that will tend to involve low external costs in context, a countervailing public benefit, or both. Fourth Amendment case law takes on these two steps using the textual prohibition of unreasonable searches and seizures, which divides the inquiry into the threshold question of what is a search or seizure (and thus regulated by the Fourth Amendment) and the subsequent question of reasonableness.

Identifying searches and seizures roughly draws the line between techniques with low external costs that should not require legal regulation and techniques with high external costs that should. (95) The reasonableness inquiry requires the government to justify the use of techniques that generally have high external costs with specific facts either showing that the imposition of costs is justified by a likely public benefit or that those costs are low in context. (96) The warrant requirement requires the government to show a likelihood of public benefit to justify a search, (97) while other exceptions, such as consent, require a showing that a technique is being used in a way that external costs are likely to be low. (98) The result is a rough cost-benefit inquiry that restricts the use of certain techniques unless the public benefit is likely to outweigh the external costs.

The analysis proceeds in three parts. The first part shows how the scope of searches and seizures plausibly distinguishes steps with low externalities from steps with high externalities. The second part considers the recurring question of technological change and the dynamic I have elsewhere called "equilibrium-adjustment." (99) The third part explains the function of the warrant requirement and exceptions to the warrant requirement.

A. Searches and Seizures

Supreme Court case law on searches and seizures is notoriously complicated, but it can be understood largely by reference to external costs [C.sub.e]. The test for searches roughly identifies the point that government action likely will trigger significant external costs relating to invasions of privacy. Similarly, the test for seizures roughly identifies the point that government action likely will trigger significant external costs relating to control of property.

1. Searches

There are two ways of understanding Fourth Amendment search doctrine: what I have called the "principles layer" and the "application layer."ioo The principles layer of doctrine announces the general standards and terms of art to be used in applying Fourth Amendment law. (101) The application layer of doctrine applies those principles to identify the specific rules that govern a specific subset of cases. (102) The distinction is important because there is a wide gap between the conceptual uncertainty of the principles layer and the relatively clear rules at the application layer. (103)

At the principles layer, the Supreme Court has stated that a search occurs when government conduct violates a "reasonable expectation of privacy" or constitutes a physical trespass. (104) The "reasonable expectation of privacy" test is difficult to understand because it is a contested term of art rather than a literal test. As I have detailed elsewhere, the Court has given this phrase different meanings in different contexts, and it has not attempted to reconcile those different approaches. (105) Given these complexities and the highly contested nature of principles layer doctrine, the more helpful way to understand Fourth Amendment search doctrine is to focus on the application layer.

At the application layer, the rules for what is a Fourth Amendment search tend to be fairly clear. Examples of searches include physically breaking into a person's home; (106) rifling through a person's pockets; (107) entering a suspect's carpos and opening up a person's packages or postal letters. (109) On the other hand, conduct that does not count as a search includes observing a person in public, (110) entering open fields not near a home, (111) accessing a person's garbage left at the side of the road for pickup, (112) aerial observation from public airspace, (113) and obtaining information that has been voluntarily disclosed to third parties. (114) The main theme among these results is the difference between inside surveillance and outside surveillance. For the most part, the doctrine can be explained by a simple principle: breaking into a private space is a search, while observing from outside is not. (115)

So understood, Fourth Amendment search doctrine plausibly identifies the point that government action will tend to trigger significant external costs relating to invasions of privacy. Different people may disagree on what specific kinds of conduct invade privacy. But existing doctrine likely matches fairly shared intuitions. The "prototypical" (116) search, entry into a home, is particularly invasive because "every man's house is his castle," (117) where "intimate activity associated with the sanctity of a man's home and the privacies of life" (118) occurs, making the home "the center of the private lives of our people." (119) Patting down a person's outer garments is a search because it is "a serious intrusion upon the sanctity of the person, which may inflict great indignity and arouse strong resentment." (120) People tend to store their most secret items away in private spaces such as their homes and their pockets, the thinking runs, so that exposure of the contents of those private spaces carries with it a great sense of violation and loss.

In contrast, the cases suggest that observation from the outside--the conduct that is not deemed a search--tends to trigger lower external costs. Public spaces "do not provide the setting for those intimate activities that the Fourth Amendment is intended to shelter from governmental interference or surveillance." (121) When we go outside, we know that we can be observed by others just as we observe others ourselves. We routinely adjust our conduct accordingly, taking steps to hide what is revealed and making observation less invasive. The government can surely learn something about a person using public surveillance. Watching a person in public can reveal their sex, height, weight, race, mannerisms, and plans for the day. But learning such widely known information is not generally associated with the kind of embarrassment or harm that comes from the exposure of hidden information in enclosed spaces such as our homes, our letters, or our pockets.

Again, opinions can vary person-to-person or community-to-community on exactly what constitutes a significant privacy invasion. In general, though, the Supreme Court's cases defining Fourth Amendment searches likely track widely shared intuitions of external costs. (122)

2. Seizures

The next threshold question, the test for a Fourth Amendment seizure, is whether the government meaningfully interferes with an individual's possessory interest. (123) The classic case is governmental taking control of a suspect's property and bringing it into police custody. Seizures also occur when the government permanently damages property, (124) although minor or only temporary damage is not a seizure. (125) Further, government agents seize a person (as compared to property) when they "restrain[] the freedom of a person to walk away." (126) The basic test is whether the government acquires control: the government "seizes" an item for Fourth Amendment purposes when it wrests control of it away from its prior possessor.

The seizure test also relates closely to [C.sub.e]. It identifies the point at which government action triggers significant externalities involving property control. Investigative steps cause significant harm when they destroy property, deny people access to their property, or limit a person's freedom of movement. The test for Fourth Amendment seizures draws that line directly. When the government destroys property, takes it away, or limits a person's freedom, the government action will tend to have a high [C.sub.e] and will constitute a Fourth Amendment seizure subject to regulation. When government action falls short of those consequences, the government action will tend to have a lower [C.sub.e] and will not count as a seizure. The seizure definition generally distinguishes minor inconveniences from more significant deprivations of property or freedom--that is, low [C.sub.e] from high [C.sub.e].

B. Equilibrium-Adjustment and the Problem of Technological Change

Focusing on [C.sub.e] to understand what constitutes a search or seizure also helps explain how Fourth Amendment doctrine responds to technological change. The Supreme Court changes Fourth Amendment doctrine over time in a predictable way that I call "equilibrium-adjustment." (127) As technological change expands or narrows government power under preexisting Fourth Amendment rules, the Court changes the rules to try to maintain the prior equilibrium of government investigative power. (128) If technological change expands government power under the old rules, the Court adds legal protections; if technological change restricts government power, the Court cuts back on legal protections. (129)

Equilibrium-adjustment can be understood as an application of the economic approach to the specific problem of technological change. Technological change alters the prior relationship among [C.sub.e], [C.sub.i] and P*V over the set N of uses. When the Court engages in equilibrium-adjustment, it changes from permissive rules to restrictive rules, or from restrictive rules to permissive rules, in ways that move toward restoring the prior relationship among these variables. This allows Fourth Amendment doctrine to maintain its rough cost-benefit approach when technology alters the costs and benefits of different investigative steps.

Two recent examples help demonstrate the dynamic: GPS monitoring in Justice Alito's concurring opinion in United States v. Jones, (130) and applying the search-incident-to-arrest exception to cell phones in Riley v. California. (131) In his concurring opinion in Jones, on behalf of four Justices, Justice Alito concluded that long-term monitoring of a GPS device installed in a car constituted a Fourth Amendment search. (132) In a 1983 case, the Court had held that monitoring a primitive radio beeper inside a car to determine its location on public roads is not a search because a person has no reasonable expectation of privacy in public. (133) In contrast to radio beepers, the GPS devices at issue in Jones are cheap, easy to use, and generate tremendous amounts of data. According to Justice Alito, that technological change made a difference. Technology had made pervasive monitoring that was previously "difficult and costly and therefore rarely undertaken" (134) instead now "relatively easy and cheap." (135) This led to a threat of more invasive monitoring than before, justifying Fourth Amendment regulation of long-term GPS surveillance. (136)

Justice Alito's equilibrium-adjustment is easily understood in economic terms. (137) Technological advances had lowered internal costs [C.sub.i] at the same time that it had raised [C.sub.e]. As [C.sub.i] dropped, use of the technique became more widespread, expanding the set [N.sub.p], thus including more uses at greater [C.sub.e] in contexts with low P. Put another way, as the technology became cheaper and more invasive, the police could use it more often, including when there was little or no law enforcement need for it. Technology lowered internal costs, creating dangers of abuse under the permissive rule. Justice Alito adopted the restrictive rule to help ensure that the government would use this high-[C.sub.e] authority only when justified by a significant P.

The recent majority opinion in Riley v. California reveals a similar dynamic. (138) In 1973, the Supreme Court had announced a bright-line rule that all property on a person at the time of arrest can be searched incident to arrest without a warrant. (139) In Riley, the Court held that a different rule applied to searching cell phones possessed at the time of arrest. The Court's opinion relied in large part on the differences between physical and digital searches. A search of physical evidence on the person were necessarily narrow, the Court noted, as a person could only store so much physical evidence in his pocket. Modern smart phones raised a different dynamic, as they can store an extraordinary amount of deeply personal information. (140) The ability to store so much personal information made the search of a cell phone much more invasive and therefore justified a warrant. (141)

The Court's equilibrium-adjustment in Riley is again readily explained in economic terms. In 1973, a search incident to arrest triggered low [C.sub.e]. The introduction of modern cell phones greatly increased the invasiveness of such searches, raising [C.sub.e]. The Court adjusted to a restrictive rule for such searches in light of that change, requiring the government to prove an expected benefit before imposing the greater external cost.
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Title Annotation:Introduction through II. An Economic Understanding of Fourth Amendment Rights B. Equilibrium-Adjustment and the Problem of Technological Change, p. 591-618
Author:Kerr, Orin S.
Publication:University of Pennsylvania Law Review
Date:Feb 1, 2016
Words:8906
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