I previously blogged about Miriam Cherry and Robert Rogers’ Tiresias and the Justices: Using Information Markets to Predict Supreme Court Decisions:
One part in particular may be quite interesting to our prediction market. Parties can make litigation or settlement decisions, that could cost large amounts of money, informed, in part at least, by how the Court will decide a pending precedent.

The greater monetary value of Tiresias [the Supreme Court information market she proposes], however, lies in litigation, particularlysettlement negotiations and decisions. In any given year, probablyhundreds, if not thousands, of civil disputes and criminal prosecutions aresettled that contain issues the Supreme Court may resolve that Term. Partiesin these circumstances face the strategic choice of whether to settle acase before the Supreme Court issues its ruling—possibly against one’s interest—or whether to wait for the Court to decide the matter.236 Advanceknowledge of what that the Court might do should be valuable in decidingwhether to settle or wait for the Court’s ruling.237

This advance knowledge should be valuable in influencing the amountof any settlement. If the Supreme Court is likely to favor one position, thatcould be factored into settlement values.238 If the Supreme Court appearslikely to rule against plaintiffs on an issue such as loss causation, classactioncertification, or permissible amount of punitive damages, then plaintiffsand their attorneys logically ought to be willing to accept less than theyotherwise might in the absence of information about the Supreme Court’slikely actions.239 Conversely, if a defendant faces a claim where the SupremeCourt is likely to remove a defense, perhaps by recognizing disparateimpact claims under the Age Discrimination in Employment Act240 or allowing a cause of action for retaliation under Title IX,241 then the defendantshould weigh the costs of an early settlement, before the plaintiffs would beemboldened by favorable outcomes, against the significant costs of continuingto litigate, such as legal fees and discovery burdens. The informationcan be particularly important in high-dollar securities cases.242 Considerablenumbers of securities lawsuits are filed each year, assessed by attorneys andcorporate boards of directors, and frequently settled. Millions of dollars aretransferred in these cases, and the transfers are influenced at least partly byhow the Supreme Court is likely to decide any relevant securities issuespending before it. Particularly in this context, a better prediction of whatthe Court is likely to do is worth significant money to companies and plaintiffs’lawyers alike. When one considers that the Court may hear approximatelyone hundred cases a term, many with monetary ramifications, thefinancial value of the Tiresias predictions could be considerable.

The article also suggests how its proposed market’s set of experts (dubbed the “den of wolves”) could actually impact how the Justices decide cases:

Most obviously, Tiresias’s den of wolves is a far moreknowledgeable group than a representative sampling of the American public.Pollsters will be unlikely to call ordinary citizens at home to ask abouttheir views on Chevron deference.263 In a sense, Tiresias is the poll of thoseindividuals most able to understand the issue the Court is facing, whichgives its data more significance. Perhaps more important, Tiresias is a predictiverather than a normative poll; the goal is not to try tell the Justiceshow to cast their votes, but only to predict how they are likely to do so. TheJustices have no lack of citizens willing to tell them what to do—they needonly look out their windows at the frequent protestors on their plaza264—butknowing the expectation of the legal community is a different sort ofknowledge: more disinterested, focused on actual expectations, and comingfrom more consequential actors—the attorneys who will interpret and administerthe Court’s ruling.

If the Supreme Court cares about trying to avoid shocking the legalcommunity, and one presumes that it does, just as corporations prefer toavoid shocking the market with unexpected financial results,265 Tiresias will tell the Court how much its ruling will surprise Court observers. If theTiresias voting is fairly closely split, the Court can conclude that the issue isunpredictable and no one particular outcome will be too surprising. On theother hand, if a substantial majority of Tiresias votes suggest one outcome,such a weight of authority by informed observers ought to merit the Court’sattention as it ponders how to rule.

The type of attention from the Court would likely vary with the natureof the prediction and the actual outcome. If the Tiresias expectation is consistentwith the Court’s planned decision, the Court can be comforted thatthe decision will not deeply shock its core constituents. All lawyers stillmay not agree with the Court’s result, but at least the outcome is expected,and individuals and institutions have had time to plan for the unfavorableruling and take whatever responsive actions might be possible.266

Conversely, if Tiresias indicates that a Court ruling is going to surprisethe legal community, that fact will provide an advance warning to the Courtof an unexpected and controversial conclusion, a warning that is not alwayspresent now. For example, the uproar after Blakely v. Washington over thepossibility of the unconstitutionality of the U.S. Sentencing Guidelines apparentlysurprised some Court members,267 prompted a rapid grant of certiorari,268 and attracted congressional concern about the decision’s effect on thecriminal justice system.269 If Tiresias could prevent the Court from walkingblindly into such a controversy in the future, that information should bevaluable.

More broadly, if a divergence exists between a strong Tiresias predictionand how the Court intends to rule, a responsible Court might wish toconsider why so many knowledgeable legal observers expect a differentoutcome. If the case involves an unpredictable swing vote going one wayrather than another in a closely divided constitutional case involving abortionor affirmative action, the confusion could be easily explained.

…

If a decisionis going to shock the legal community, it is better that the Justicesknow beforehand. Perhaps it may lead some Justices to change their votes,but even if the result does not change, the Court can devote more time in itsopinion to explaining what will be a surprising result, and thus a longer,more thorough opinion may produce increased acceptance of a controversialresult.273

A responsible court modifying opinions so as not to shock its constituents?

The quote of the day from Stephen Rappoport seems more apt than ever:

“Perhaps some day, in a particularly difficult case, a clerk for the Justice assigned to write an opinion for the Court will check FantasySCOTUS to determine how the decision should come out.”

This section, which discusses how FantasySCOTUS can impact the Court’s legitimacy as an impartial institution is interesting:

Nevertheless, it still feels as if Tiresias, in a sense, would be intrudinginto the Court’s private chambers.281 If Supreme Court decisions can be accuratelyforetold in advance by an information market, is it still possiblethat the Justices are engaged in dispassionate legal adjudication that warrantsdeference from the Congress, the President, and the population? Ordoes predictability somehow diminish the Court? On the one hand, it mayseem so if the Court could appear to be reduced in most cases to taking thefinal official step of promulgating what an information market already knewwould occur. On the other hand, such predictability on legal questions canbe valuable and respected; some might even call it the rule of law.