The Problem of Measuring Legal Change, with Application to Bell Atlantic v. Twombly

Measuring legal change - i.e., change in the way that judges decide cases - presents a vexing problem. In response to a change in the behavior of courts, plaintiffs and defendants will change their patterns of filing and settling cases. Priest and Klein's (1984) selection model predicts that no matter how favorable or unfavorable the legal standard is to plaintiffs, the rate at which plaintiffs prevail in litigation will not predictably change; thus, legal change cannot be measured with data on court outcomes. In this paper, I extend the selection model to develop a methodology for measuring legal change, even in the presence of selection effects. I apply this methodology to a recent, high profile Supreme Court case, Bell Atlantic Corp. v. Twombly. My model generates novel predictions, which are confirmed in the data, and I find that Twombly caused no legal change, even after accounting for possible selection effects.