Doing the Public a Disservice: Behavioral Economics and Maintaining the Status Quo

by Alison M. Newman

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Abstract

When deciding whether to grant a preliminary injunction or a stay pending appeal, courts consider, among other factors, whether granting the preliminary injunction or stay would disserve the public interest. In the context of individual-rights cases, courts often experience pressure to remedy the alleged constitutional harms immediately. However, behavioral-economic concepts demonstrate that such quick action can negatively affect society as a whole. Specifically, granting a right and then taking it away, as happens when a lower court grants a right and is reversed on appeal, results in a net loss to society. Using the recent same-sex marriage litigation, this analysis demonstrates that to avoid disserving the public interest, courts should consider the behavioral-economic effects of loss aversion and the endowment effect within the public-interest factor of the tests for preliminary relief and should attempt to maintain the status quo until the decisions are final.

Doing the Public a Disservice: Behavioral Economics and Maintaining the Status Quo

by Alison M. Newman

Click here for a PDF file of this article

Abstract

When deciding whether to grant a preliminary injunction or a stay pending appeal, courts consider, among other factors, whether granting the preliminary injunction or stay would disserve the public interest. In the context of individual-rights cases, courts often experience pressure to remedy the alleged constitutional harms immediately. However, behavioral-economic concepts demonstrate that such quick action can negatively affect society as a whole. Specifically, granting a right and then taking it away, as happens when a lower court grants a right and is reversed on appeal, results in a net loss to society. Using the recent same-sex marriage litigation, this analysis demonstrates that to avoid disserving the public interest, courts should consider the behavioral-economic effects of loss aversion and the endowment effect within the public-interest factor of the tests for preliminary relief and should attempt to maintain the status quo until the decisions are final.