Comity, Rent-Seeking, and Judicial Incentives

Underlying this paper are two additional (and so far implicit) assumptions:

first, that the State’s preferences for whether to cooperate or defect accurately reflect the preferences of its citizens; and, second, that judges accurately re-flect the preferences of the State in their decisions. Both assumptions are sub-ject to question.

First, the State’s preferences may be the result of rent-seeking behavior by businesses, lawyers,⁴⁷ and others within the State (such as prospective arbitra-tors⁴⁸). The concentrated economic interests of such parties may result in State preferences for cooperation or defection that are less than optimal for the State as a whole.

Second, the incentives of judges in a State may result in decisions that di-verge from the preferences of the State itself. The extent of the didi-vergence depends on the means by which judges are selected and the model of the judi-cial utility function used. Elected judges (like legislators) may be more sub-ject to rent-seeking behavior than appointed judges.⁴⁹ Appointed judges may make decisions based on their own ideological views, desire for promotion, or preference for leisure.⁵⁰

Future research could usefully examine the effect of rent-seeking and judi-cial incentives on the economics of comity.

G. Conclusion

This paper has offered some tentative insights into the economics of comity.

First, comity can serve a cooperative function by providing the basis for

45 Born (2009), 306.

46 Drahozal (2000), 468–70.

47 Whincop (1999) 421 (“If lawyers are an effective political interest group in the formulation of a jurisdiction’s private international law, they may have incentives to favour non-recognition by their states. A jurisdiction that refuses to enforce foreign judgments arguably increases the incentive of plaintiffs to choose it as a forum.”).

48 Drahozal (2005).

49 Hansen (1999).

50 Posner (1993).

trines that enhance cooperation with other States. On this view, a State that refuses to grant comity is defecting rather than cooperating. But if the original decision itself constitutes defection, refusing to grant comity is not defection but is instead an attempt to sanction the other State’s defection. Thus, a court’s decision whether to grant comity can be framed as based on whether the State decision being examined constitutes cooperation or defection. Sec-ond, given the uncertainty courts face in determining whether a foreign State is cooperating or defecting, comity itself can be seen as establishing a default presumption that a particular type of State decision constitutes cooperation (or, in cases in which courts refuse to grant comity, as a default presumption of defection). Third, rules derived from comity principles should be treated as default rules rather than mandatory rules. Thus, as U.S. and U.K. courts have held – but contrary to decisions of the European Court of Justice – comity concerns should not preclude a court specified in an exclusive forum selection clause from entering an anti-suit injunction against foreign court litigation.

Finally, the paper suggests examining the importance of rent-seeking and ju-dicial incentives as possible avenues for future research on the economics of comity.

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