Saturday, November 03, 2007

Why economic theory doesn't apply to plea bargain agreements

Ever since I majored in economics as a youngster at UT-Austin two decades ago, I've always had a latent fascination with the dilettantish economic assumptions behind much of criminal law and the flaws behind them. These faulty assumptions are perhaps most evident in the arena of plea bargaining, where attorneys and judges operate under an absurd legal fiction that a plea agreement is a mere "contract" entered into freely by two parties just like any economic arrangement. Of course, one party's only agreeing because of coercion, and that fact skews every other economic assumption made by plea-bargain apologists in favor of the current system.

Doc Berman points to an interesting (if logorrheic) academic paper by Russell Covey from Georgia State law school asking whether plea bargains can be reasonably analyzed as simple economic transactions. Covey declares that current "research suggests that conventional law and economics descriptions of plea bargaining as the product of the rational, bilateral exchange of entitlements driven by punishment-maximization/minimization strategies simply does not provide an adequate account of the plea bargaining system."

In English, that says free markets don't coerce contracts and plea bargains do.

Because of inherent "cognitive biases" at play during market transactions that protect consumers from bad outcomes, Covey argues, traditional economic theory would suggest we should expect relative few plea bargains. "Cognitive research ... depicts a bargaining context dominated by converging vectors all pointing away from negotiated settlements and in the direction of adversarial dispute resolution," he writes. "What is more, because most criminal defendants do not pay their own legal costs but instead receive state-compensated lawyers, one of the most significant economic incentives to compromise litigation—legal costs—is frequently not part of the defendant’s calculus."

So a strict economic model would predict few plea bargains, but in Texas, about 97% of all criminal convictions result from plea bargains, and other states see similarly high ratios. So, Covey asks, how does the system overcome these "cognitive biases" against agreeing to punishments that don't follow defendants' natural tendencies or maximize their rational best interests? As it turns out, he argues:
not only is the criminal justice system functionally designed to induce defendants to plead guilty (a now banal observation), but many apparently arbitrary and oppressive features of current criminal practice can be explained largely as devices whose function, in whole or in part, is to neutralize the plea-discouraging effects of cognitive bias. Incorporation of the insights of cognitive psychology into pleabargaining theory thus provides a more nuanced explanation of the shape of many features of the criminal justice system. Taking cognitive bias into account casts new light on the factors that drive plea-bargaining outcomes, including the magnitude of sentencing differentials, the pervasiveness of pretrial detention, and the prosaic procedural brutality that is a universal feature of virtually every encounter with the system.
How does the system induce pleas? For starters, using data from state courts, Covey calculates the existence of a baseline 292% "trial penalty," meaning the typical sentence for the same defendant might be three times as high if he or she exercises their constitutional right to trial. That's a big discount, but it's just for starters. Indeed, "Others have calculated average state trial penalties of 300%, rising in some states to as high as 500%. Abundant anecdotal evidence indicates that even higher trial penalties are not uncommon, particularly in dispositions of first-time offenders eligible for probation" Taking into account when charges are actually reduced instead of sentences lessened, Covey says sentencing discounts in some cases can approach 1,000%, meaning the plea deal gets the defendant 10% of the possible sentence at trial.

So part of the reason people plea, according to these data, may be that they get a "really good deal" compared to what could possibly happen to them at trial, where the same prosecutor has vowed to push for a much harsher penalty. In practice, systemic checks on the magnitude of such "discounts" are "illusory," says Covey. Except in high profile cases which are handled atypically, he writes, "most prosecutors have virtually unchecked freedom to negotiate criminal charges in whatever way they believe will maximize utility." (Translation: Prosecutors typically can do whatever the hell they want to, for whatever reason their fickle hearts desire.)

Covey also argues that an overall lack of information on the part of defendants ("discovery" in criminal cases is much more limited than in civil lawsuits) makes them more likely to accept a plea deal, especially at a high discount, to "minimize uncertainty."

The biggest coercive mechanism, though, may be pretrial detention for defendants who cannot afford bail, since accepting a plea deal (particularly one that gets them out on probation) typically is the most immediate way they can get out of jail and back to their job, home and family. The effects of pretrial detention, combined with high economic costs that make fighting criminal charges "costly, burdensome and painful," writes Covey, are
enhanced by the use of high-pressure bargaining tactics that mirror the ubiquitous market ploys that retailers everywhere use to induce buyers to part with their money. “Today-only” and “going-out-of-business” sales are cognitive devices, the effectiveness of which has been empirically verified through ample business experience. Such sale tactics are explainable as applications of the principles of loss-aversion, the endowment effect, and reframing, because they recast the retailer’s offer from a loss (of the opportunity to shop for a better deal) to a potential gain (of the opportunity to get today’s sale price rather than tomorrow’s higher one). Prosecutors and judges similarly exploit the one-day (and sometimes one-minute) sale tactic to induce reluctant defendants to plead guilty.
That explains the thought processes behind decisions that we understand instinctively: Someone sitting in jail wants out. A prosecutor tells them they can take a deal today and leave with a dramatically reduced sentence, or sit in jail and wait until trial, which could be months later, win, lose or draw. The charges must be pretty serious for most people not to accept a deal under those circumstances, if only because they don't want to wait several months to get on with their lives.

Covey discounts the role of defense attorneys advising their clients to plea, declaring that may be the most "rational" choice given the circumstances. But I think he understates this factor. In some Texas counties fee structures for attorneys actually encourage plea bargains over trials, particularly for misdemeanors. Some defense attorneys are willing to fight and some aren't, but them that aren't, historically, are often more likely to get court appointments. That's starting to change thanks to reforms instituted earlier this decade, but it still happens.

In any event, Covey argues that the very nuts-and-bolts structure of the legal system can be primarily explained by officialdom's goal of extracting pleas from defendants. Bottom line, he concludes:
The need to overcome criminal defendants’ cognitive resistance to plead guilty helps to account not only for the popularity among prosecutors and politicians of determinate sentencing and mandatory minimums, but also for the prevalence of pretrial detention, the harsh rigors of the courthouse “bullpens,” the routines employed by prison authorities and court officials to transfer jailed criminal defendants back and forth to the courthouse for court appearances, the long lines, endless waits, and strict conduct rules in misdemeanor courts, and the generous grants of continuances to criminal litigants.
I think there needs to be a renewed debate over the ubiquitous role of plea bargains in modern criminal jurisprudence, and I applaud Covey for examining the absurdist legal and economic theories used to justify undermining defendants' constitutional right to trial. Unfortunately, law review treatises filled with legalese and academic jargon won't be what sparks such a debate. I'm glad to see folks in the academy examining such topics, but I wish they'd learn to communicate what they find in more publicly accessible ways. These topics are too important not to let the public in on the discussion.

See Covey, Russell D., "Reconsidering the Relationship between Cognitive Psychology and Plea Bargaining." Marquette Law Review, Vol. 91, No. 1, 2007. Available at SSRN.


Anonymous said...

I work at West Texas and this is exactly what worries me in regards to the Brookins & Hernandez mess.
There has been no mention of a trial date and it makes me sick that a plea bargain could be a possibility for them.

Anonymous said...

Perhaps his research is a testament to those who think criminals act rationally when committing crime and taking the path of least resistance in their own (criminals) support of the Crime Control Model. Actually, I think plea bargaining slaps due process in the face.

skeptilingus said...

The data indicate the opposite of the point of the article. A high discount for plea bargaining confirms (rather than contradicts) a bias toward non-accommodation.

Most (but not all) prosecutors are ethical. Ethical prosecutors dismiss the charges where there is insufficient evidence (ie less than reasonable doubt) to go to trial. Consequently, the defendants who are left in the plea bargaining process are generally guilty. Consequently, high discounts (sometimes as high as 90%) must be given to persuade these "guilty" defendants to plead guilty.

Anonymous said...

It is not up to the prosecutor to decide if there is reasonable doubt!

Prosecutors only decide they want to "win". They just have to figure out how much it will take to coerce the defendent into giving up their constitutional right to due process.

Most prosecutors are just working hacks, they could care less about actual guilt or innocense.

Gritsforbreakfast said...

@ skeptilingus: No one is "generally guilty." Individuals are guilty or innocent, and the pressures described above empirically, undeniably can and do lead to plea bargains by innocent people.

However, even granting your point, to the extent it's accurate, I don't think it contradicts Covey's argument, which is that the structure of the system, including the heavy discounts typical in most pleas, are designed to overcome people's cognitive bias against plea bargains.

But Covey adds that steep discounts wouldn't be enough if the system didn't "re-frame" the issue through lengthy pretrial detention, e.g, the use of "take it or leave it" offers, and a variety of other coercive mechanisms. The criminal justice system, he says, is not centered around truth seeking per se but is "functionally designed to induce defendants to plead guilty." Unfortunately, I think that's a) mostly accurate, and b) quite disturbing. DNA exonerations of innocents after many years in prison represent the bitter fruits of the system's failure to assess guilt rather than just coerce pleas.

Anonymous said...

Actually, if you are an irate taxpayer swindled into support of "tuff on crime" sentencing scams you should be even more irate. If someone enters your home and steals your prized possessions [burglary, breaking and entering] and the prosecutor plea bargains a minor possession of controlled substance for a six month sentence you'd be POed. Crime victims get gypped by this practice for the few times that the police actually try to catch the perpetrator.
If we weren't trying to criminalize every kind of noxious personal behavior - regardless of actual harm to citizen taxpayers - we could try and sentence the appropriate number of people for the most noxious crimes. Instead we cram our jails with prostitutes [free market for sex - if legal], drug users, and gambling facilitators and let chronic sex offenders, thugs, and chronic DUIIs out on the street.

Anonymous said...

And what is the alternative to plea agreements? Should every criminal case go to trial? Where will the money come from to hire all the new judges, court reporters, bailiffs, clerks, prosectuors, public defenders, etc? How about some solutions? Do you have a better system in mind?

Gritsforbreakfast said...

Ken, I didn't say get rid of plea bargains, did I? You're arguing against a straw man, not the points I've made here. My argument is that they're not freely entered into "contracts" in the same way we speak of "contracts" in economic transactions.

Plea bargains may well be the best thing for an individual defendant in many cases, but if so let's get rid of the coercive elements, e.g., eliminating unnecessary pretrial detention, expanding discovery for defendants, and regulating the use of the high-pressure bargaining tactics all would be a good start toward making the negotiations more fair. As a side benefit, reducing pretrial detention would eliminate jail overcrowding in most counties, freeing up more money to hire the clerks, etc., y'all need to handle your business in a less coercive manner. best,

Anonymous said...

90% discounts... I knew it, but it still floors me to hear it. Given that plea bargains are so common (over 95% of cases), that suggests that society actually thinks that the plea-bargain punishment (the 10%) is the CORRECT punishment for the given offense. That means society as a whole has placed the 1000% premium as punishment, not for the crime, BUT FOR EXERCISING YOUR RIGHTS.

It's just stunning. Crime, as it is defined, faces limited punishment. Exercise of constitutional rights faces extraordinary punishment.