Monday, June 8, 2015
Susan C. Morse (Texas), Safe Harbors, Sure Shipwrecks, 49 UC Davis L. Rev. ___ (2016):
In law, a safe harbor describes behavior that will not be penalized, and leaves other facts that fall outside the safe harbor to be judged case-by-case. A sure shipwreck, as I call it, is the mirror image. It describes behavior that violates the law as a matter of rule, and leaves other conduct to be judged by a standard. Prior literature analyzes rules and standards at length. But it has largely missed safe harbors and sure shipwrecks, even though these hybrids are everywhere in statutory, regulatory and case law.
The analysis in this Article reveals that safe harbors and sure shipwrecks produce asymmetrical incentives. Safe harbors encourage those affected by them to converge on the safe harbor boundary from both directions. Sure shipwrecks encourage bunching immediately on the compliant side of the sure-shipwreck boundary as a result of the incentive to move out of the noncompliant space. Ex ante versus ex post costs, overinclusion and underinclusion risks, and interest group influence are some of the considerations that affect safe-harbor and sure-shipwreck policies.