If you peruse the D.C. Circuit’s webpage often — and, really, who doesn’t? 😉 — you’ve no doubt noticed an announcement that hasn’t changed for a long time:

This may confuse you. First, why is dated “2014-15”? And second, why is an announcement about clerkship hiring of all things given arguably the most prominent placement on the Court’s webpage?

(emphasis obviously added)

There is a story behind this announcement. I’ve briefly discussed it before, but because the key events happened almost exactly five years ago,* this is a good week to tell that story. Here is the punch line: The D.C. Circuit in effect changed clerkship hiring for the entire country when it announced that for clerks scheduled to begin in 2014, it would no longer participate in the Federal Law Clerk Hiring Plan.

To understand the story, recall that clerking is a great job for a host of reasons. More students, however, would like to clerk than there are clerkship slots. And although all clerkships are valuable, some — as a rule — are considered more valuable than others. Likewise, although there are many talented law students, some students are deemed “better” potential clerks than others for a host of reasons (some sensible and some not). Thus, students compete against each other for clerkships, and judges compete against each other for clerks. This competition leads many judges to hire students early in their law school careers. It also encourages judges to engage in disreputable behavior like giving “exploding offers” that must be accepted on the spot. Concerned, many federal judges agreed to participate in a “Plan”; these judges would not hire clerks until a set date during the third year of law school. In theory, this would stabilize the market.

Predictably, however, things fell apart. As I’ve explained elsewhere:

Proponents believed that by pushing back the clerkship hiring date in a coordinated fashion, order could be brought to a chaotic process, and the jarring spectacle of future clerks being hired before the second year of law school would end. But the power of positive thinking cannot change the fact that the Plan has always been doomed to failure. Viewed through an antitrust lens, the problem is apparent: The idea that coordination will hold in a judiciary with hundreds of competing chambers, limited transparency, and no real enforcement mechanism is hope divorced from reason. Like a cartel with too many players, the Plan unravels because the temptation to hire early is just too strong.

Indeed:

From the beginning, a handful of judges simply refused to comply. No one voted on the Plan, it favored judges in locations where applicants could complete multiple interviews on the same day, and it made the hiring process complicated and expensive for applicants who had to dash around the country for interviews. Many judges who initially accepted the Plan, moreover, became disillusioned as every year judges hired more clerks before the Plan allowed. As each application cycle more and more judges opted to “cheat” and hire early, the Plan’s collapse became a certainty.

This unraveling created real unfairness: “Applicants who [were] unlucky enough to have recommenders who [would] not contact judges early [were] at a disadvantage. Judges who wait[ed] until the interview deadline risk[ed] losing preferred applicants. And law schools that devoutly follow[ed] the Plan los[t] out to their craftier counterparts.” Equally bad, the Plan did nothing about exploding officers, and, in fact, encouraged them.

That is why the D.C. Circuit’s 2013 announcement was — and still is — so important. It reads:

Although the judges of this circuit would uniformly prefer to continue hiring law clerks pursuant to the Federal Law Clerk Hiring Plan, it has become apparent that the plan is no longer working. Because participation in the plan is voluntary, a significant percentage of all United States circuit judges must agree to follow it if it is to work appropriately. During the past few years, a significant and increasing number of circuit judges around the country have hired in advance of the plan’s interview and offer dates, and it is likely that they will continue to do so. As a result, continued adherence to the plan is no longer fair and equitable to either students or judges.

We stand ready to work with the judges of the other circuits to develop an appropriate successor to the current plan. In the meantime, however, the judges of this circuit will hire law clerks at such times as each individual judge determines to be appropriate. We have agreed that none of us will give “exploding offers,” that is, offers that expire if not accepted immediately. Rather, when a judge of this circuit gives a candidate an offer, the candidate will have a reasonable time to consider the offer and interview with other judges before accepting or declining. Additional practices applicable to individual judges may be found on the judges’ OSCAR pages.

Following the D.C. Circuit’s announcement, it was obvious that the Plan’s days were numbered. The D.C. Circuit, after all, had played an anchoring role. Certain desirable applicants waited to apply broadly because a shot at the D.C. Circuit was considered worth waiting for; in hopes of hiring those students (whose number exceeded the number of D.C. Circuit clerk slots), judges elsewhere waited for the D.C. Circuit to move. And in hopes of hiring clerks that might be competitive for those judges, other judges also waited, and so on down the line. Once the D.C. Circuit stopped playing that anchoring role (because it was tired of losing out on good candidates; the D.C. Circuit wasn’t a great anchor because, obviously, there are lots and lots of great judges around the country), the Plan officially collapsed. This change has many downsides, of course, but at least things are more transparent and fair.

That’s why it is a good thing that the D.C. Circuit’s website still has that announcement in a prominent place. Hopefully it reminds everyone that good intentions are not enough; unintended consequences are real, and if we don’t pay close attention to institutional design, we may harm those we hope to help.

(If you are interested in the full version of the story, here is an article I wrote on the subject: The Future of Federal Law Clerk Hiring.)

***

The Court decided a number of cases this week.

In The Loan Syndication Ass’n v. SEC, Judge Williams (joined by Judges Kavanaugh and Ginsburg) ruled against federal regulators looking to regulate certain collateralized loan obligations (CLOs) under Dodd-Frank. The statute requires federal regulators to issue regulations “to require any securitizer to retain an economic interest in a portion of the credit risk for any asset that the securitizer, through the issuance of an asset-backed security, transfers, sells, or conveys to a third party.” Federal regulators at a handful of agencies relied on this language to promulgate rules regulating CLOs. The Court didn’t buy it: Although jointly-promulgated regulations can receive deference, “[t]he language of the statute invoked by the agencies does not encompass [CLO] activities” because the CLO managers never hold the securitized loans at any point, and so do not “retain a portion of the credit risk.” Hence, “[t]he agencies have gone beyond the statute to require [CLO] managers to ‘retain’ risk by acquiring it.” (This opinion has a lot more to say; it merits a close read.)

In Kansas Corporation Commission v. FERC, Judge Henderson (joined by Judges Srinivasan and Ginsburg) dismissed KCC’s petition to review FERC’s approval of “formula rates … for future public utilities to use in operating electric transmission facilities” because “KCC has not suffered an injury in fact sufficient to establish standing.” This is a technical case — and an interesting one. The gist is that KCC challenged FERC’s authorization of currently nonexistent “future affiliates … to replicate, at some unknown time in the future, the formula rates approved for use by [existing affiliates] without … having to submit the requisite section 205 filings to establish the justness and reasonableness of those rates.” The Court rejected KCC’s challenge because the injury was “not concrete, particularized, actual and imminent.”

In Stewart Liff v. Office of Inspector General, Judge Wilkins (joined by Chief Judge Garland and Judge Pillard) addressed allegations of “reputational injury caused by scurrilous reports from the Office of Inspector General for the Department of Labor (‘DOL-OIG’) and the Office of Personnel Management (‘OPM’), disseminated by government officials and publicized by the Washington Post.” Long story short:

The District Court should have decided the availability of a Bivens remedy as a threshold question gating whether the Bivens Defendants must defend against this suit in their personal capacities. Reviewing that question of law directly, we conclude that no Bivens remedy is available for Liff’s claims. Congress has provided significant remedies for disputes between contractors and the government entities that engage them, as well as for persons aggrieved by the government’s collection, maintenance, and dissemination of information. In light of these alternative remedies and the comprehensive remedial schemes they represent, we decline to extend a Bivens remedy for Liff’s claims.

Finally, the Court, following a rehearing petition, reissued City of Phoenix v. Huerta. Here is the change: “For the foregoing reasons, we grant the petitions, vacate the September 18, 2014 order implementing the new flight departure routes and procedures at Sky Harbor International Airport, and remand the matter to the FAA for further proceedings consistent with this opinion.”

You know, I think I’ll close this week’s post with a quick thought. As I’ve grown older, I’ve come to appreciate even more that competing for clerkships should be kept in perspective. To be sure, I think students should try to clerk — it can be an amazing experience. But if you base your happiness on how well you play the “clerkship game,” you are destined to be unhappy. A clerkship, after all, will end, but the spirit of grasping lives on. I have nothing against healthy ambition. But ambition must be tempered. Trust me: There is much, much more to life than clerking. Cf. But for Wales?

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* It actually happened on January 29, 2013. Ideally I would have posted this story last week. Alas, last week was a busy one.

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